Correct e-invoicing: All you need to know

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E-invoices are already part of everyday life for public sector clients. Companies on the other hand will still be able to decide for themselves whether to use paper, pdf- or e-invoices until 2025. In the long term, however, there is no way around e-invoices. You should therefore know what requirements apply. These include, in particular, legal and technical requirements for standardised electronic invoice formats.

We explain the most important aspects of introducing e-invoices - from prerequisites and requirements to archiving and digitalisation.

E-invoices: What does it mean for companies?

Electronic invoices are an important tool for the digitalisation and automation of business processes. They can be flexibly integrated into digital workflows and accelerate the digital capture, processing, archiving and forwarding of invoices. This reduces the susceptibility to errors in accounting, prevents fraud attempts and promotes efficiency and productivity.

A look at the advantages of e-invoicing makes it clear why the Federal Ministry of Finance's planned Growth Opportunities Act (Wachstumschancengesetz) should make electronic invoicing mandatory from January 2025 at the latest. According to a Bitkom survey, around 45 per cent of all companies surveyed already use e-invoices. So you see, in the long term, there is no way around electronic invoicing in Germany and the EU.

💡Tip from Accountable: Are you looking for an e-invoicing tool? Writing e-invoices with Accountable is. completely free of charge and meets all the legal requirements. Test it now!

The most important basics of e-invoicing

In order to fulfil official legal requirements, e-invoices must meet the following criteria:

• Authenticity of the invoice origin
• Integrity of the invoice content
• Legibility of the invoice
• Structured, electronic file format (XML)

The aspects of authenticity, integrity and legibility ensure that invoices in the digital original remain unalterable and legible without media breaks. This not only speeds up accounting processes, but also reduces the susceptibility to errors or fraud.

Legal requirements for e-invoices

Important conditions for the introduction of e-invoices include a structured electronic format and the possibility of automatic, electronic processing. Electronic invoices must therefore have structured metadata that enables fast, automated capture, indexing and classification.

💡Tip from Accountable: The Federal Ministry of Finance will make e-invoicing mandatory across all sectors from 1 January 2025.

In order to comply with the official, standardised definition of e-invoices, you must fulfil the following legal requirements:

• EU Directive (2014/55/EU) and EU invoicing standard EN16931 for electronic invoicing (currently only B2G, after the Growth Opportunities Act also B2B)
• Value Added Tax Act (UstG) on the content and storage of invoices
• Abgabenordnung (German Fiscal Code, AO) and Handelsgesetzbuch (German Commercial Code, HGB) on invoice requirements
• GoBD on accounting, documentation and storage
• Growth Opportunities Act (Wachstumschancengesetz)

Technical requirements for e-invoices

The basic technical requirements that e-invoices should fulfil include:

• Technology-neutral: creation, transmission and receipt are electronic and technology-neutral and without media discontinuity.
• Structured: E-invoices are in a structured, electronic format to ensure reliable capture and reading. Common e-invoice formats include XRechnung and ZUGFeRD.
• Authenticity and integrity: To ensure the authenticity and integrity of invoices, you need an internal control procedure. This includes manual or automated invoice audit trails to monitor payment obligations and invoice content.
• Legible and complete: To ensure legibility and presentation, invoice creation and presentation programmes are essential. This includes accounting and tax software such as Accountable. It is also important to observe all legally required information.
• Digital storage obligation: Digital invoices must be stored for ten years in accordance with tax law, the German Commercial Code (HGB) and GoBD. Digital archiving must be tamper-proof and unchanged in its original state. According to GoBD, in-house formats are possible as long as invoices remain legible in their original condition.
• Documented: Every standardised accounting system requires complete procedural documentation - including information on the legal framework, technical requirements, user and operating documentation, technical system documentation and internal control and verification systems.
• Automatically readable: Electronic invoices must be available promptly or immediately in the event of an audit by the authorities and must be easily readable by machine.

Getting ready for e-invoices: A Checklist

The introduction of e-invoices is suitable for freelancers and the self-employed as well as KMUs and large companies alike. The technical and legal hurdles are comparatively low. In addition, space and cost-saving e-invoicing has a positive long-term effect on productivity and return on investment.

To make the introduction as easy as possible for you, our checklist holds the most important points:

• Determine your needs and the status quo: Depending on the size of your company, you need to know for which areas electronic invoicing offers the greatest benefits. Also get an overview of existing paper invoices that can be digitised to save space and costs.
• Choose suitable tools and plan your budget: Get an overview of electronic document management systems to automate invoice processing through workflows and reduce bureaucracy. Plan the budget for implementation accordingly. For freelancers and self-employed professionals, tools for invoicing like Accountable or a separate, structured mailbox for digital invoices are sufficient.
• Standardised rules for sending e-invoices: Establish standardised, secure methods for sending invoices. This includes sending by email, transmission by server fax or web download. This is also possible with software like Accountable.
• Communicate the introduction of e-invoices externally: Whether customers, suppliers, partner companies or other clients - announce the changeover early on. E-invoices currently require the consent of the recipient. As an invoice recipient, you should prepare now for the processing of e-invoices in view of the possible e-invoicing obligation.
• Introduce e-invoices step by step: Depending on the size of your company, you can start the changeover in a test phase with trained employees. Clear control procedures are important here, with which you can check legibility and formal correctness of content. This can be done manually or automatically through resubmissions and open processes for incorrect invoices.
• Prompt postings and timely settlement: After successful invoice verification, e-invoices should be forwarded to the relevant departments on a daily basis if possible and paid on time.
• Observe the digital retention obligation: Invoices are subject to a ten-year retention obligation. Therefore, make sure that you archive checked, posted invoices digitally and in an audit-proof manner - ideally with a document management system.

Why are e-invoices important?

With a seamless, standard-compliant invoice workflow, you are preparing for the digitalisation of accounting. In addition to complying with legal obligations, e-invoices also offer you the following benefits:

• Cost savings and more efficient accounting
• Increased productivity thanks to faster processing times
• Reduced susceptibility to errors and greater security thanks to automated, transparent invoicing processes
• Sustainable business processes thanks to less paper consumption
• Compliance with statutory accounting and retention obligations
• Greater customer satisfaction and future-orientated competitiveness

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Author - Markus Thomas Boldt

Markus is an experienced tax advisor partner at Accountable, where he plays a crucial role in supporting and consulting the company’s financial and tax strategies.

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