Electronic invoicing – simply explained

In Germany, public-sector clients as well as companies working on contracts for federal authorities are required to issue electronic invoices. The relevant regulation governing this obligation is the E-Invoicing Ordinance. As a result, switching to electronic invoicing has become part of everyday business.

Starting in January 2025, B2B companies must be able to create, send, and process invoices electronically. However, the legislator has granted a transition period until January 2028. Depending on annual revenue, this transition phase may end earlier. After that, invoices may only be sent electronically.

Electronic invoices are processed via software and can appear in the following formats:

• Structured data such as XML or EDI format
• Unstructured data such as PDF or Word files, or even as email text or image files
• Hybrid data, a combination of image or PDF files with XML or EDI format

In practice, hybrid data formats are the most commonly used.

• Email or email attachment
• DE-Mail
• E-Post
• Fax via computer
• SMS with download link via the web

• Lower costs: No need for paper or postage when creating invoices.
• More space: No shelves filled with paper archives – electronic invoices eliminate the need for printing and physical storage.
• Time savings: Creation, processing, and storage of e-invoices are (semi-)automated and digital. In many cases, invoices can even be generated directly from the ERP system.
• Fewer errors: No manual data entry and no media disruptions mean significantly fewer mistakes.
• Happier customers: Shorter processing times speed up the entire invoicing cycle.
• End-to-end digitalization: Another important business process becomes fully digital.
• Environmental and climate protection: Less paper means fewer trees need to be cut down. In addition, fewer mail deliveries reduce CO₂ emissions.

• An electronic invoice must be created, sent, received, and processed in an electronic format.
• Another requirement: it must also be human-readable.
• In addition, a control procedure must ensure that the authenticity of the origin can be verified.

In principle, an electronic invoice must contain the same details as a paper invoice.

These include:

• Name and address of the company
• Name and address of the customer
• Tax number and/or VAT identification number
• Date the invoice was issued
• Type of delivery and quantity of items
• Type and scope of service provided
• Date of delivery or provision of service
• Due date for payment
• Net amount, tax amount, and tax rate
• Any pre-agreed discounts or reductions

A digital signature is not required for an e-invoice to be valid.

Electronic invoices fall under the provisions of the GoBD. GoBD stands for “Principles for the proper management and storage of books, records, and documents in electronic form, as well as data access.” These rules also apply to electronic invoices.

For companies, this means a legal obligation to archive e-invoices in compliance with GoBD.

To process electronic invoices in compliance with GoBD, formats such as ZUGFeRD and XRechnung are used within software systems. Both are XML-based data models that enable invoices to be exchanged consistently across countries. Simply storing PDF files locally or in the cloud is not sufficient. Instead, they must be archived in an audit-proof manner. This requires meeting specific criteria.

Electronic invoices must be:

• Traceable and verifiable (e.g., through signature)
• Complete
• Correct
• Properly maintained
• Unalterable
• Accompanied by process documentation
• Secure against loss
• Recorded and posted in a timely manner

Section 14b of the German VAT Act (UStG) stipulates that invoices must be retained for ten years – regardless of whether they are electronic or in paper form. The ten-year period begins at the end of the calendar year in which the invoice was issued.

During retention, invoices must at all times meet the requirements of §14 para. 1 sentence 2 UStG: authenticity of origin, integrity of content, and readability. In addition, taxpayers are obliged to comply with the provisions of the VAT Act, the Fiscal Code (AO), and the GoBD.

When introducing e-invoices, several prerequisites need to be in place:

• Incoming invoices are processed regularly and checked for accuracy and formal correctness.
• Electronic invoices are booked as soon as the review is complete.
• Payments for electronic invoices are made within the stated payment terms.
• Proper retention of invoices is ensured.
• All data processing complies with GDPR requirements.
• Customers and suppliers have agreed to the sending of e-invoices – recipient consent is therefore ensured.

Paper invoice

A paper invoice is represented in printed form. It cannot be processed automatically or electronically.

PDF invoice

A PDF invoice is issued, transmitted, and received in electronic format. At the same time, it is still a visual representation of the invoice and cannot be processed automatically or electronically.

Electronic invoice

An e-invoice, on the other hand, is transmitted and received electronically and can also be processed automatically and digitally. This eliminates media disruptions.

The legal requirement for e-invoicing presents companies with new challenges. With Yaveon 365 EDI, you can meet these requirements efficiently and reliably.

• Create and import e-invoices in XRechnung format, based on posted sales invoices and credit memos.
• Freely configurable mappings for import and export – tailored to invoice recipients and issuers.
• Automated document dispatch and re-dispatch via email, FTP/SFTP, or AS2 (optional).
• History and logs for full transparency of all sent e-invoices.
• Automatic download of incoming invoices, with creditor number validation to prevent duplicate imports.
• Incoming invoice checks with automated creation of purchase invoices for validation.