What is UBL Format and Why is It Important for Your Business
Since 2015, e-invoicing has been mandatory when exchanging documents with public administrations in some regions, and it is gradually becoming mandatory for all companies worldwide. For this reason, governments are working on implementing the UBL format, which is becoming increasingly important.
What is UBL? Why is it gaining so much relevance in recent times? And what is its relationship and its importance in electronic invoicing? We clarify it by answering the most frequently asked questions.
In this article, we’ll cover:
What is UBL?
UBL (Universal Business Language) is a standardized XML file format designed to simplify the automation of financial information exchange. It includes all the details of a manual invoice, including customer data, amounts, and product information, in a standardized and structured format. This allows seamless communication between different software systems globally while ensuring compliance with the fiscal requirements of each receiving country.
Originally introduced in 2004 for small to medium-sized businesses (SMEs), UBL has evolved into a vital tool for international procurement and e-invoicing. By simplifying the invoicing process, UBL minimizes manual data entry and resolves compatibility issues between various accounting systems, thereby improving the efficiency of cross-border transactions and invoicing.
Why is UBL Important?
Sending and receiving invoices abroad used to be complex, expensive, and confusing because of multiple standard formats. Therefore, UBL is more than just a technical format. It was developed by the OASIS (Organisation for the Advancement of Structured Information Standards), designed to be used globally, for businesses of all sizes. But why do people care about it so much?
UBL and the Peppol Network
UBL is closely linked to Peppol, a global e-procurement network that enables businesses and governments to exchange electronic documents efficiently. This connection is crucial: through Peppol, companies can send e-invoices and other key documents. UBL serves as the standardized format that ensures these documents comply with the varying fiscal and legal requirements of different countries.
How Does UBL Work?
UBL is a markup language and serves as a framework to structure and describe information and data so that software can understand and interpret it. Because it is an XML document, the text elements and labels are written in code. Hearing that it is built out of code might seem complicated, but the UBL is particularly popular because of its simplicity, distilled into just two straightforward steps:
How to Read an UBL Invoice
Instead of manually entering data from an invoice, the UBL files can be processed automatically by your invoicing software. The processing steps would therefore look something like:
What Are the Countries That Require the UBL format?
Governments globally recognize the benefits of the UBL format and electronic invoicing, both for themselves and businesses. It allows them to keep track of the transactions almost in real time and eliminate manual mistakes, therefore reducing tax fraud. Because of that, governments all around the world are implementing regulations and laws to encourage or mandate the UBL and e-invoicing adoption. Here is a list of countries requiring the UBL format:
Europe
Asia-Pacific
The Americas
Middle East
Benefits of using Universal Business Lenguage
UBL provides multiple different benefits for both the receiver and sender. That by itself is already a benefit, as it makes it a point of interest for everyone. Imagine sending the UBL to optimize your process and the receiver doesn’t have the software to open it. Another important advantage for both sender and recipient is the automation and extra security when sending and processing e-invoices.
Benefits for the Reciever
Benefits for the Sender
If you are the one thinking about issuing UBL documents, the list of benefits is really long:
What are the challenges in processing a UBL file?
UBL by itself doesn’t have that many challenges. The biggest problem is more that it is still a fresh thing, at the beginning of its lifetime, and the complete global adoption hasn’t happened yet. Therefore, the most common challenges are:
How do you tackle the UBL challenges?
Set up your system in such a way that it allows you to process not only UBL invoices but also non-UBL invoices digitally. In other words, make sure you can scan invoices received via mail and submit PDF purchase invoices to your OCR solution.
In addition, provide a simple solution that helps you itemize lines, match them with a purchase order, or transact for proper monitoring. Also, invest in a workflow solution that allows you to efficiently and easily submit digitally received non-UBL and UBL invoices to the appropriate approver so they can approve the invoice and proposal entry.
How to Integrate the UBL Format
One of the key benefits of UBL is its integration capabilities, as many systems can integrate the tools that generate UBL files, providing benefits for all company sizes.
The process of UBL integration proceeds as follows:
Simplify Your E-Invoicing with UBL and Space Invoices
Ready to streamline your invoicing process and ensure compliance with global regulations? Space Invoices makes UBL integration effortless, offering you:
Don’t let invoicing complexity slow your growth. Contact us today and achieve global compliance with ease.
The information in this guide is strictly informative, as regulations and timelines change frequently. While we make every effort to monitor updates and maintain the accuracy of our content, we recommend consulting with a tax professional or e-invoicing specialist for the most reliable and personalized advice. The latest update was made on December 6th, 2024.
Additional reading:
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