International e-invoicingBy Peter Schenkel,November 28, 2024Back to all posts

EDIFACT vs. Peppol: differences and switching

EDIFACT is an international United Nations standard for the electronic exchange of business messages such as purchase orders, despatch advices and invoices. Peppol, by contrast, is a network with fixed rules for transport, addressing and invoice format. In other words, EDIFACT mainly describes how a message is structured, while Peppol also governs how it reaches the recipient.

With the e-invoicing mandate, companies face the question of whether their existing EDIFACT connections are sufficient or whether switching to Peppol is worthwhile. This article explains both approaches and helps you decide.

What is EDIFACT?

EDIFACT stands for Electronic Data Interchange for Administration, Commerce and Transport. The standard is maintained under the umbrella of the UN body UN/CEFACT, and its syntax is standardised as ISO 9735. Since the late 1980s, EDIFACT has been widespread above all in retail, logistics and industry.

EDIFACT defines numerous message types. The most important ones in the invoicing process are:

• ORDERS: purchase order
• ORDRSP: order response
• DESADV: despatch advice
• INVOIC: invoice
• REMADV: remittance advice

Because the full standard is very extensive, many sectors work with subsets. A well-known example is EANCOM from GS1 for retail. In the automotive industry, separate standards such as VDA or Odette messages are also common. The terms EDI and EDIFACT are often used interchangeably. However, EDI is the umbrella term for electronic data interchange, and EDIFACT is one of several formats, alongside ANSI X12 in North America, for example.

The EDIFACT format: how a message is structured

An EDIFACT message is not XML but a compact text file made up of segments. Each segment starts with a three-letter code and ends with an apostrophe. Data elements are separated by + and :. A heavily shortened excerpt from an INVOIC message:

UNH+1+INVOIC:D:96A:UN:EAN008'
BGM+380+RE-2026-0815+9'
DTM+137:20260928:102'
NAD+SU+4012345000009::9'
NAD+BY+4098765000002::9'
LIN+1++4000000000001:EN'
QTY+47:10'
MOA+77:1190.00'
UNT+9+1'

Some elements in the example:

• UNH and UNT frame the message. D:96A names the directory, i.e. the version of the standard.
• BGM+380 identifies the document as an invoice with the invoice number.
• NAD+SU and NAD+BY stand for supplier and buyer, identified here by GLN.
• MOA contains amounts, QTY quantities.

The UN regularly publishes new directories. In practice, business partners specify in an agreement which directory, which subset and which segments they use. This is precisely what makes EDIFACT flexible, but also laborious: every connection is individually agreed, tested and maintained.

What is Peppol?

Peppol is an international network based on the four-corner model. Sender and recipient are each connected via a certified access point, and addressing is done using the Peppol ID. Invoices are sent in the Peppol BIS Billing 3.0 format, which implements the European standard EN 16931 in the XML syntax UBL. The article What is Peppol? The network and access points explained explains the details.

EDIFACT vs. Peppol compared

Peppol is not simply "better" than EDIFACT. EDIFACT covers entire supply chains and is deeply embedded in many sectors. Peppol plays to its strengths where many changing business partners need to be reached without setting up each connection individually.

Can EDIFACT be sent via Peppol?

Not directly. Peppol transmits documents according to the Peppol specifications, which for invoices means BIS Billing 3.0 in UBL. An EDIFACT INVOIC must therefore first be converted into this format. This is usually done by a service provider or middleware.

A clean conversion requires the EDIFACT message to contain all mandatory information under EN 16931. If, for example, the VAT breakdown, payment terms or buyer reference are missing, validation fails. There is a syntax binding of the standard to UN/EDIFACT as well (CEN/TS 16931-3-4). However, only UBL and CII are specified as syntaxes for invoices to public contracting authorities in the EU.

Is an EDIFACT invoice an e-invoice?

Under § 14 UStG (German VAT Act), an e-invoice is an invoice in a structured electronic format that enables electronic processing. A format in accordance with EN 16931 is permitted, such as XRechnung or ZUGFeRD. However, invoice issuers and recipients can also agree on a different format, provided the information required for VAT purposes can be extracted correctly and completely into a format in accordance with EN 16931 or a format interoperable with it. Existing EDIFACT procedures can meet this requirement. You should check this with your tax adviser on a case-by-case basis.

There is also a transitional rule for EDI: under § 27(38) UStG, invoices for supplies in 2027 may still be issued in a non-standard-compliant electronic format until 31 December 2027, provided they are transmitted via EDI in accordance with Recommendation 94/820/EC and the recipient agrees. From 2028 at the latest, an EDI invoice must also meet the requirements for an e-invoice.

When EDIFACT, when Peppol?

Keep EDIFACT if

• you exchange high volumes with a few large partners,
• purchase orders, despatch advices and invoices are automated and closely interlinked,
• your partners stipulate EDIFACT contractually, for example in retail or the automotive industry.

Add Peppol or switch if

• you have many smaller or changing invoice recipients,
• you supply public authorities in Germany or abroad,
• you deliver to countries such as Belgium, where Peppol is the standard channel for B2B invoices,
• new partners need to be connected quickly without setting up an EDI project every time.

In practice, a combination often makes sense: EDIFACT for existing key accounts, Peppol and email for everyone else.

Switching from EDIFACT to Peppol: how to proceed

1. Take stock: Which partners currently receive which messages, in which subset and via which channel?
2. Check mandatory information: Do your INVOIC messages contain all the information required by EN 16931? You should close any gaps in your ERP before converting.
3. Define your Peppol ID: Decide under which identifier your company should be reachable in the network. Find out more in the article Peppol ID: meaning, application and verification.
4. Choose your connection: The invoice data comes from the ERP via an interface and is sent via a Peppol service provider. faktoora is a certified Peppol provider and handles sending and receiving via the network, connected via API or via ERP integrations.
5. Migrate partners step by step: Start with partners who can already be reached via Peppol, and keep EDIFACT running in parallel for the rest.

Frequently asked questions

What is EDIFACT in simple terms?

EDIFACT is a UN standard for electronic business messages. It defines how, for example, a purchase order or invoice is structured as a sequence of segments so that the systems of different companies can process it automatically.

What is the difference between EDI and EDIFACT?

EDI is the umbrella term for the electronic exchange of structured business data. EDIFACT is one specific format for it, alongside others such as ANSI X12 or sector-specific standards.

Will EDIFACT still be allowed from 2028?

Yes, provided the agreed EDIFACT format allows the mandatory information to be extracted correctly and completely into a format in accordance with EN 16931. The transitional rule for non-standard-compliant EDI invoices ends on 31 December 2027.

Will Peppol replace EDIFACT?

Not completely. Peppol is particularly strong for invoices and for exchange with many partners. For closely integrated supply chains with purchase orders and despatch advices, EDIFACT remains widespread in many sectors. Many companies use both.

Sources

• § 14 UStG, gesetze-im-internet.de
• § 27 UStG, gesetze-im-internet.de
• European Commission: Obtaining a copy of the European standard on eInvoicing
• OpenPeppol: Peppol BIS Billing 3.0