As more third-party e-Invoicing networks offer customers the promise of efficient and affordable electronic invoice submission, suppliers find themselves connecting to multiple networks to send invoices to a variety of customers. Two years ago, Receivable Savvy asked about interoperability and whether there was a solution forthcoming. The landscape was a bit murky back then but there was progress being made behind the scenes and hope was on the horizon.
What is Interoperability?
In that 2021 blog post, I offered a description of interoperability, as defined by Meriam-Webster and Wikipedia:
The ability of a system to work with or use the parts or equipment of another system.
A characteristic of a product or system to work with other products or systems.
The current state of third-party e-Invoicing does not mirror the ideal definition of interoperability, as many suppliers connect to numerous customers using various networks, ultimately slowing the rate of electronic invoicing adoption.
Satisfying a Market Need
The industry was screaming for change, longing for a fair and reciprocal environment that promotes an open market for electronic invoicing. Despite no real progress being made and legacy networks focused on preserving their existing market share, interoperability began taking hold in Europe in 2008 with the initiation of PEPPOL.
PEPPOL (Pan-European Public Procurement On-Line) is a framework that facilitates cross-border eProcurement, enabling trading partners to interchange standard electronic documents like e-Orders, e-Invoices, and eCatalogues over the PEPPOL network. PEPPOL Access Points link users to the network, letting them exchange electronic documents in line with PEPPOL specifications. This structure allows users to choose a single preferred Access Point provider to connect with all network participants, embodying a ‘Connect once, connect to all’ principle.
Launch of the Digital Business Networks Alliance Exchange Framework
While Europe had made significant progress in establishing an interoperability environment, the U.S. made major strides in the last two years. Enter the Digital Business Networks Alliance (DBNA). Formed in 2023 by the participants of the Business Payments Coalition’s (BPC) E-invoice Exchange Market Pilot, DBNAlliance was developed to provide oversight of the new Exchange Framework, resolving decades-long issues resulting from a lack of e-invoicing interoperability. With a set of standards and policies, the Framework allows businesses to connect once and share electronic invoices with one another, regardless of the platform, system, application, or network they use for processing invoices.
The DBNAlliance Exchange Framework consists of a four-corner network involving four types of participants: the supplier, two access points (service providers), and the buyer. Suppliers send invoice information to their access provider, which connects to the Exchange Framework, locates the buyer’s access point, packages the invoice into the exchange standard, and securely sends the invoice to the buyer’s access point. The buyer’s access point then forwards the invoice data into the buyer’s AP system for approval and processing for payment.
The DBNAlliance Exchange Framework is open to various types of service providers who can operate as access points, including:
- B2B Networks
- AP Providers
- ERP Software
- Lockbox Providers
- AR Solution Providers
- Procurement Software
- Banks/Financial Institutions
- Billing Providers
- E-invoice Service Providers
- Accounting Software
- Optical Character Recognition (OCR) Providers
- Payment Service Providers.
The mission of the DBNAlliance is to promote and facilitate the use of the Exchange Framework and encourage all businesses in the United States across all four corners to use it.
Using the DBNAlliance Exchange Framework
Supplier organizations may use the DBNAlliance Exchange Framework, through their participating service provider, at no additional charge, further simplifying and encouraging adoption. To operate as an Access Point within the Exchange Framework, a service provider must register as a member with the Digital Business Networks Alliance. As an Access Point, the implementation of the Exchange Framework becomes simplified and encourages interoperability with other Access Points, consequently reducing the service provider’s total expenses. This also assures consistency in the technology and standards employed for the exchange of electronic documents among different parties. For additional information and to register as a member of the DBNAlliance, solution providers may visit the membership section of the DBNAlliance website.
With the launch of the DBNAlliance Exchange Framework, it appears that e-Invoicing interoperability has finally come to the U.S. The desired next step is ensuring ubiquity of electronic invoicing and full participation of businesses across all industries regardless of revenue size.
Ernie Martin is Founder and Managing Director of Receivable Savvy. He brings over 25 years of experience in financial supply chain management, marketing and communications and draws upon his extensive experience to share knowledge and best practices with AR professionals. He is currently a board member of the Digital Business Networks Alliance where he serves as marketing chair and previously chaired the BPC’s Vendor Forum in collaboration with the Federal Reserve Bank of Minneapolis. His resume includes time at several well-known brands and companies such as Tungsten Network, Delta Airlines, CIGNA Healthcare and Georgia Pacific as well as a number of years as an independent consultant.