E-Invoicing and Peppol

E-invoicing is the automated exchange of structured invoice data between supplier and buyer systems, without the need for a PDF attachment that must be read by OCR. Instead of a supplier emailing a PDF invoice that the buyer's AP team must enter manually (or extract via OCR), e-invoicing sends the invoice as machine-readable data directly into the buyer's accounting or AP system. The data arrives pre-structured -- supplier name, ABN, invoice number, line items, amounts, GST -- without any extraction step.

The Peppol (Pan-European Public Procurement On-Line) network is the international standard framework for e-invoicing. Australia and New Zealand adopted the A-NZ Peppol framework in 2019, and the ATO has been actively encouraging e-invoicing adoption since 2020, particularly for invoices to the federal government (which was mandated to receive Peppol e-invoices from 1 July 2022). The ATO has also consulted on mandating e-invoicing for business-to-business transactions more broadly, though no mandate has been introduced for the private sector as of 2025.

How Peppol works

The Peppol network operates through accredited access points -- software providers certified to send and receive Peppol invoices. A supplier registered with a Peppol access point can send invoices directly to any buyer also registered with a Peppol access point, regardless of which accounting software each party uses. The invoice data flows through the network in a standardised XML format, which is then parsed by the receiving party's system and converted into a bill transaction in their accounting software.

For AP teams, e-invoicing through Peppol effectively eliminates the invoice capture step. An invoice that arrives via Peppol is already in the accounting system as a structured transaction -- the supplier name, ABN, invoice number, and amounts are pre-populated without OCR extraction. The AP team reviews the transaction for accuracy, applies coding if not pre-configured, routes for approval, and processes payment. The processing time is significantly faster than for PDF invoices, and the data quality is deterministic (the invoice contains what the supplier entered) rather than probabilistic (what OCR extracted).

Adoption and practical implications

E-invoicing adoption in Australia is growing but remains well below majority penetration for private sector transactions. Most Australian businesses continue to receive the majority of their supplier invoices as PDF attachments by email. E-invoicing capability is most relevant for businesses that supply or are supplied by federal, state, or territory government agencies (which have e-invoicing mandates or strong preferences), and for businesses with large, sophisticated supplier or customer relationships where both parties have invested in compatible systems.

For AP teams assessing their readiness for e-invoicing, the practical steps are: confirm whether your accounting software or AP platform supports Peppol (Xero, MYOB, and most major AP automation platforms do); register with an access point provider; and notify suppliers that you can receive e-invoices. The supplier registration process on their side is the binding constraint -- you can be ready to receive Peppol invoices, but they must also be registered with an access point to send them.