Companies based in Germany must be able to receive electronic invoices (e-invoices) from January 1, 2025. The aim of mandatory e-invoicing is to combat VAT fraud. However, due to the implementation effort involved for companies in switching to e-invoicing, the legislator is granting transitional arrangements for the years 2025 to 2027. This means that paper invoices may continue to be sent until December 31, 2026. Other electronic formats such as PDF require the consent of the recipient.
From January 1, 2027, companies with a previous year’s turnover of at least EUR 800,000 will be required to send e-invoices in the B2B sector. Companies with a previous year’s turnover of less than EUR 800,000 will still be allowed to issue other invoice formats in 2027. Failure to comply with the e-invoicing requirement may result in legal consequences such as fines or other sanctions.
With the gradual introduction of mandatory e-invoicing in Germany from 2025, many companies are facing the challenge of adapting their invoicing processes to the changed regulations. E-invoices must have a structured, machine-readable format and comply with the requirements of European standard EN 16391. In Germany, the xRechnung and ZUGFeRD (Central User Guide of the German Electronic Invoice Forum) formats are particularly widespread.
Several aspects are relevant in connection with the introduction of e-invoicing. For example, different international compliance requirements and various standards for e-invoice formats in European countries must be taken into account. Europe-wide harmonization is not possible due to differing legislation and specifications in individual countries.
In addition, e-invoicing has consequences for internal invoicing processes. Every company must decide which tool to use to implement the e-invoicing obligation. In any case, the restructuring of the current finance and accounting system involves costs that must be planned for accordingly. The higher the existing data quality, the smoother the transition to e-invoicing will be.
However, companies should not see e-invoicing as a tedious obligation, but rather seize the opportunity to modernize their accounting systems. Now is the right time to digitize and automate invoicing processes. Electronic invoices enable end-to-end digital processing—from invoice creation to payment—and seamless integration into business processes. This speeds up processes, increases efficiency, reduces errors, and saves costs. It also avoids input errors that frequently occur when invoice data is entered manually.
Electronic processing also offers enormous opportunities for automation and increases transparency in invoicing processes. All steps can be traced in detail and without gaps. The electronic transmission of invoices enables faster and more efficient processing and approval of payments, shortening the overall invoicing cycle. This results in shorter payment terms for outgoing invoices and improved liquidity for the company, as outstanding invoices are settled more quickly. E-invoices in a structured format comply with legal requirements and increase legal certainty. In addition, companies improve their global tax compliance while reducing the likelihood of disputes.
On the one hand, the mandatory e-invoicing is a key legal requirement that must be implemented; on the other hand, electronic invoice processing offers enormous opportunities for automation and transparent invoicing processes. E-invoicing ensures that all invoice data is imported directly into the processing systems without media breaks, which is not the case with paper and PDF invoices. Compared to paper invoices, electronic invoices are more efficient, cost-effective, and environmentally friendly. Because the digital invoicing process saves resources, e-invoicing also contributes to companies’ sustainability goals.