Intro
As the landscape of digital finance gradually moves from paper invoice to e-invoices, the process of tracking payment status for money owed becomes more well put together. This can be attributed to the automation that e-invoicing systems provide to boost efficiency via monitored transaction records of all invoice documents.
That said, invoices come in different formats and this is the determining factor that sets apart an e-invoice from any other type of invoices. The fundamental distinction lies in whether the data the invoice contains is structured or unstructured. But “What does that even mean?” You’d ask, “Stick around to know the difference with us” is what we’ll say!
What is Structured Data in E-Invoicing?
The term structured data in e-invoicing refers to e-invoices whose information is organized in a pre-defined, machine-readable format. The purpose of this is to make it easier to allow computer software systems to automatically identify, extract, and process the data needed from the invoice without any need for human intervention.
Think of it as communicating in a particular language. When sending e-invoices, you have to ensure they have been generated in a format the recipient’s system can read.
Key Characteristics of Structured E-invoices
Structured invoices are machine-readable; this means that the data of such invoices is encoded in a way that software applications can directly understand and interpret. Furthermore, they come with standardized formats that ensure they adhere to formats mandated either on a global level or a national level.
In Saudi Arabia, for instance, ZATCA has set a standardized format for the invoices that mandates them to be structured in a way that ensures the final issued e-invoice format is XML compliant.
But Before We Proceed, What is An XML Invoice?
XML refers to eXtensible Markup Language which is a foundational markup language that defines the elements and attributes of e-invoice data by using tags (eg: <InvoiceNumber>, <BuyerName> ). An XML invoice is an e-invoice sent or received as an XML file.
It’s a set of rules designed to be understood and readable by both machines and humans. It sets the stage for sharing information between different applications and systems easily. By using XML invoicing, businesses can easily send and receive invoices electronically without worrying about compatibility issues.
However, there are other standardized formats besides XML such as UBL (Universal Business Language) and EDI (Electronic Data Interchange).
What is UBL (Universal Business Language)?
UBL is an XML schema designed for business documents such as invoice documents (e-invoices). UBL for XML language is similar to how grammar is to language. UBL defines the business rules for terms to be used in the documents.
For instance, it explains how the “invoice number” or “buyer name” or any other invoice data should be represented on the XML file. UBL was developed by the Organization for the Advancement of Structured Information Standards OASIS that facilitates document sharing between different companies’ software systems whether inside the same country or across borders.
An XML invoice contains text and tags; together they make up the data to be stored, read, and shown after being processed by the software. The text describes the data to be stored while the tags explain the type of the data to be stored.
In the example shown below (Screenshots from the ZATCA official website); “Maximum Speed Tech Supply LTD” is the text data and the tag that describes it is “Registration Name”.
But bear in mind that the first screen shot shows how the XML file is understood by the software while the second one shows how it’s understood by humans.
What is Unstructured Data in E-Invoicing?
Unstructured invoice data is non-standardized information that requires manual interpretation or advanced technologies like OCR for meaningful extraction. Unstructured data is considered a non-standardized invoicing method that uses human-readable invoices, and is less reliable and secure than structured invoice data transfer.
Examples of unstructured invoices include PDF invoices, email invoicing, and Word Format…etc. Such formats make it hard for the software to extract the data out of the invoice as it’s not structured in a way that allows the system to understand how and what data to be extracted.
Key Characteristics of Unstructured E-invoices
Human-readable:
Can be understood by humans but not software systems.
Free-form:
As they lack tags or fixed fields for data elements.
Drawbacks of Unstructured Data
Unstructured data for e-invoicing presents several challenges, including inefficiency, high error rates, lack of automation, compliance risks, and increased costs. Manual data entry consumes time and resources, and human errors can lead to invoicing errors and payment delays.
Accounting software cannot automatically process unstructured data, and modern regulations exclude certain formats, posing penalties for non-compliance.
Why it Matters in E-invoicing
In e-invoicing, XML is the technical format for the e-invoice document’s data. It replaces unstandardized methods with XML files where all the invoice details (seller, buyer, items, amounts, taxes, etc.) are structured using XML tags. This structured data allows for automation, accuracy, anti-tampering, and compliance with tax authorities. Furthermore, it is a global standard widely implemented by many countries including Saudi Arabia.
Its Role in PEPPOL
PEPPOL is a network that enables secure, cross-border electronic exchange of documents and invoices. It was developed to standardize the way businesses and governments exchange e-documents in Europe, but it has grown into a global standard adopted in various countries and regions including The United Arab of Emirates.
By 2026, UAE will start with the implementation of E-invoicing in UAE but it’s going to be built around what has been called the 5-corner PEPPOL model. One of PEPPOL’s core components is its use of standardized document specifications and this includes UBL as it’s one of the main formats it relies on.
By adopting PEPPOL, companies ensure that their e-invoices can be sent and received seamlessly through a trusted network of certified Access Points like InvoiceQ ensuring businesses comply with the FTA mandates.
Conclusion
The shift from unstructured formats like PDFs to structured formats such as XML and UBL is transforming e-invoicing. Structured data enables automation, compliance, and seamless integration essential in today’s evolving regulatory landscape.
