E-invoicing 2025: What you need to know

Don’t worry, you’re not alone: the introduction of e-invoicing from 1 January 2025 is raising questions for many businesses. Both large and small businesses will be affected by the introduction of e-invoicing. The obligation to create and receive electronic invoices is a fundamental change in the B2B world. In this article, we answer the most frequently asked questions about e-invoicing to help you get started and make the transition easier.

Here are the key points in advance:

The e-invoicing obligation from 2025 will apply to all business-to-business (B2B) invoices over €250.
There are transitional periods for sending e-invoices.
Receipt of e-invoices will be mandatory from 1 January 2025, with no exceptions and no transition period.

What is an e-invoice?
Who will be subject to mandatory e-invoicing from 2025?
When will e-invoicing be mandatory?
Will there be transition periods?
Are there any exemptions?
Are there differences between an e-invoice and a PDF invoice?
How does an e-invoice look?
E-invoicing programme: What software or tool do I need for e-invoicing?
What e-invoice formats are available?
How do I switch to e-invoicing?
What are the benefits of e-invoicing?
How does e-invoicing work?
What are the legal requirements for e-invoicing?
What happens if I don’t use e-invoicing?
Conclusion

What is an e-invoice?

An e-invoice (electronic invoice, also known as e-bill or e-invoicing) is an invoice that is created and transmitted in a machine-readable format.

Please note: A PDF, an Excel file or, for example, a JPG image of a paper invoice is not an e-invoice.
Although these are digital files, an e-invoice must be created in specific formats so that it can be processed by software programs. It is possible to have a tool read a PDF, but this is error-prone.

The main characteristics of the e-invoice are

It contains so-called structured data, e.g. in the form of an XML file.
It is fully machine-readable and can therefore be processed by appropriate tools.
It is sent via electronic channels.

Who will be subject to the e-invoicing obligation from 2025?

The e-invoicing obligation applies to all companies that do business with other companies (B2B). Although there are transitional periods (see point 4: Are there transitional periods?), these only apply to the sending of e-invoices.

Receipt of e-invoices will be compulsory from 1 January 2025, without exception and without any transitional period. Small businesses and the self-employed are also affected.

E-invoicing is already mandatory for companies participating in tenders or contracts with public authorities.

Invoices issued in the business-to-consumer (B2C) sector, i.e. to private individuals, are currently exempt. However, this area may also be regulated in the future.

When will e-invoicing be mandatory?

From 1 January 2025, electronic invoicing (e-invoicing) will be mandatory for the B2B sector in Germany and many other EU countries.

Companies that exchange invoices with other companies will have to be able to issue them in electronic form from this date.

Are there transition periods for the introduction of e-bill?

Yes, there are transition periods. BUT: these only apply to the sending of e-invoices, not to the receiving of them.

This means that businesses must be able to receive, verify, process and archive e-invoices from 1 January 2025.

The transitional periods for sending e-invoices apply to

Businesses with a turnover of more than €800,000 in the previous year until 31.12.2026
Businesses with a turnover of up to €800,000 in the previous year until 31/12/2027

Are there any invoices that are exempt from the obligation?

Yes, there are exceptions:

Invoices under €250
Invoices sent to private individuals (B2C)
Invoices for services that are exempt
Tickets

Are there differences between an e-invoice and a PDF invoice?

Yes, the main difference between an e-invoice and a PDF invoice is the structure of the data.

A PDF invoice is a digital image of a paper invoice and usually requires manual processing as the data is not machine-readable. Although a PDF can be read by software, this results in errors as PDFs are not optimised for this.

An e-invoice, on the other hand, contains structured data (e.g. in XML format) that can be read and processed automatically by software. This allows for fully automated processing without manual intervention.

A PDF invoice or an Excel file is not an e-invoice!

How does an e-invoice look?

An e-invoice is an electronic, machine-readable invoice. It contains the same information as a paper or PDF invoice, such as invoice number, date, amount, etc.

The difference is that the data is in a structured form so that it can be processed automatically by software. The two most common formats are ZUGFeRD and XRechnung.

E-invoicing in 2025: This is what an electronic invoice looks like when it is not processed by software.

E-invoice programme: What software or tool do I need for e-invoicing?

To create, send and receive e-invoices, companies need suitable software solutions. There are various programmes available, suitable for both small and large businesses.

Ideally, the solution is integrated with an ERP system to avoid the need for additional tools.

ERP and accounting software

Many modern ERP (Enterprise Resource Planning) and accounting systems now offer integrated functionality for the creation and processing of e-invoices.

Popular vendors such as SAP, Microsoft Dynamics, DATEV and Lexware have already developed modules that support e-invoicing requirements.

For example, e-invoices for small businesses can be processed through an ERP system such as SAP Business One. Fastbill could be a good solution for sole traders.

What e-invoice formats are available?

The XRechnung and ZUGFeRD formats are currently permitted according to the EU standard EN-16931.

How do I move to e-invoicing?

You should plan the implementation of e-invoicing in your company carefully. Get advice from your accounting software or ERP system provider.

Here is a checklist of the most important steps:

1. Take stock of current processes: The first step is to assess your current invoicing processes. What systems are in use? What types of invoices are being sent? What data sources are used? Do you already have an ERP system? Can that system handle an e-invoice? When in doubt, seek external advice.

2. Choose the right software: Now you need to choose a software solution that meets the e-invoicing requirements. Look for compatibility with existing systems. Ideally, your accounting software or ERP system should already include an e-invoicing tool.

3. Employee training: The introduction of e-invoicing requires that employees are trained in the new processes. It is important that everyone involved learns how to use the new software and understands how e-invoices are processed.

4. Test phase: Before the changeover is complete, you should carry out a test phase to ensure that all systems work smoothly and that e-invoices are processed correctly.

What are the benefits of e-invoicing?

Regardless of the 2025 legislation, it makes sense to switch to e-invoicing.Here are some of the benefits of switching to e-invoicing:

Increased efficiency: Because e-invoices are machine-readable, they can be processed without manual intervention. This saves time and reduces the risk of errors. This significantly increases the efficiency of the accounting process.
Cost savings: Companies save significant costs on printing, paper, postage and storage. Archiving and storing electronic invoices is much easier. In addition, invoices can be processed and paid more quickly, improving cash flow.
Transparency and security: e-invoices offer greater transparency and traceability as all data is structured and easy to verify. In addition, e-invoices meet high security standards that ensure the protection of sensitive data.
Sustainability: Switching to e-invoicing reduces the use of paper, which is good for the environment. Digitising processes is an important step towards sustainable business.

How does the e-invoice work?

The e-invoice is based on standardised electronic formats optimised for machine processing. Essentially, an e-bill goes through the following steps:

Creation: The invoice is created in a structured format (e.g. XML). This structure ensures that all relevant information, such as invoice number, invoice date, amounts, tax information, etc., is available in a clearly defined format.
Transmission: The invoice is sent electronically. Receipt and processing:The recipient can import the e-invoice directly into their accounting or ERP system. As the data is machine-readable, processing is automatic and requires no manual intervention.
Archiving: Like traditional invoices, e-invoices must be archived for several years.However, this can be done completely digitally, saving paper and storage costs when storing the e-invoice.

What are the legal requirements for e-invoicing?

The legal requirements for e-invoicing are clearly defined and are based on EU Directive 2014/55/EU and the German E-Invoicing Act.

The most important points are:

Formats: E-invoices must be in a structured electronic format.In Germany, ZUGFeRD and XRechnung are common formats.
Transmission: Transmission must take place via secure channels that meet data protection and data security requirements, e.g. via the PEPPOL network.
Content: E-invoices must contain all legally required information, such as invoice number, date, tax rates, amounts and clear identification of the issuer and the recipient.
Storage obligation: E-invoices are also subject to legal retention requirements, i.e. they must be archived in an audit-proof format.

What happens if I don’t use e-invoicing?

Businesses that do not use e-invoicing from 1 January 2025 risk legal consequences.Depending on the country and legislation, this could result in fines or invoices not being recognised and paid.

E-invoicing is already mandatory for companies doing business with the public sector.

Failure to comply can lead to exclusion from tenders. It is advisable to use XRechnung for invoicing public customers, as most public institutions work with this format.

Conclusion

The introduction of e-invoicing from 2025 is a decisive step towards digitisation and process optimisation in companies. Regardless of the legal requirements, it will help your company to process invoices more digitally, faster and more cost-effectively.

There are transition periods for sending and issuing e-invoices.

But from 1 January 2025, all businesses (except B2C) must be able to receive an e-invoice.In the long term, e-invoicing will be the standard in business communication.

Those who invest early will reap the benefits of a leaner and more efficient accounting system.

E-invoicing 2025: What you need to know

E-invoicing 2025: What you need to know

Here are the key points in advance:

The e-invoicing obligation from 2025 will apply to all business-to-business (B2B) invoices over €250.

There are transitional periods for sending e-invoices.

Receipt of e-invoices will be mandatory from 1 January 2025, with no exceptions and no transition period.

What is an e-invoice?

An e-invoice (electronic invoice, also known as e-bill or e-invoicing) is an invoice that is created and transmitted in a machine-readable format.

The main characteristics of the e-invoice are

It contains so-called structured data, e.g. in the form of an XML file.

It is fully machine-readable and can therefore be processed by appropriate tools.

It is sent via electronic channels.

Who will be subject to the e-invoicing obligation from 2025?

The e-invoicing obligation applies to all companies that do business with other companies (B2B). Although there are transitional periods (see point 4: Are there transitional periods?), these only apply to the sending of e-invoices.

Receipt of e-invoices will be compulsory from 1 January 2025, without exception and without any transitional period. Small businesses and the self-employed are also affected.

E-invoicing is already mandatory for companies participating in tenders or contracts with public authorities.

Invoices issued in the business-to-consumer (B2C) sector, i.e. to private individuals, are currently exempt. However, this area may also be regulated in the future.

When will e-invoicing be mandatory?

From 1 January 2025, electronic invoicing (e-invoicing) will be mandatory for the B2B sector in Germany and many other EU countries.

Companies that exchange invoices with other companies will have to be able to issue them in electronic form from this date.

Are there transition periods for the introduction of e-bill?

Yes, there are transition periods. BUT: these only apply to the sending of e-invoices, not to the receiving of them.

This means that businesses must be able to receive, verify, process and archive e-invoices from 1 January 2025.

The transitional periods for sending e-invoices apply to

Businesses with a turnover of more than €800,000 in the previous year until 31.12.2026

Businesses with a turnover of up to €800,000 in the previous year until 31/12/2027

Are there any invoices that are exempt from the obligation?

Yes, there are exceptions:

Invoices under €250

Invoices sent to private individuals (B2C)

Invoices for services that are exempt

Tickets

Are there differences between an e-invoice and a PDF invoice?

Yes, the main difference between an e-invoice and a PDF invoice is the structure of the data.

A PDF invoice is a digital image of a paper invoice and usually requires manual processing as the data is not machine-readable. Although a PDF can be read by software, this results in errors as PDFs are not optimised for this.

An e-invoice, on the other hand, contains structured data (e.g. in XML format) that can be read and processed automatically by software. This allows for fully automated processing without manual intervention.

A PDF invoice or an Excel file is not an e-invoice!

How does an e-invoice look?

An e-invoice is an electronic, machine-readable invoice. It contains the same information as a paper or PDF invoice, such as invoice number, date, amount, etc.

The difference is that the data is in a structured form so that it can be processed automatically by software. The two most common formats are ZUGFeRD and XRechnung.

E-invoicing in 2025: This is what an electronic invoice looks like when it is not processed by software.

E-invoice programme: What software or tool do I need for e-invoicing?

To create, send and receive e-invoices, companies need suitable software solutions. There are various programmes available, suitable for both small and large businesses.

Ideally, the solution is integrated with an ERP system to avoid the need for additional tools.

ERP and accounting software

Many modern ERP (Enterprise Resource Planning) and accounting systems now offer integrated functionality for the creation and processing of e-invoices.

Popular vendors such as SAP, Microsoft Dynamics, DATEV and Lexware have already developed modules that support e-invoicing requirements.

For example, e-invoices for small businesses can be processed through an ERP system such as SAP Business One. Fastbill could be a good solution for sole traders.

What e-invoice formats are available?

The XRechnung and ZUGFeRD formats are currently permitted according to the EU standard EN-16931.

How do I move to e-invoicing?

You should plan the implementation of e-invoicing in your company carefully. Get advice from your accounting software or ERP system provider.

Here is a checklist of the most important steps:

1. Take stock of current processes: The first step is to assess your current invoicing processes. What systems are in use? What types of invoices are being sent? What data sources are used? Do you already have an ERP system? Can that system handle an e-invoice? When in doubt, seek external advice.

2. Choose the right software: Now you need to choose a software solution that meets the e-invoicing requirements. Look for compatibility with existing systems. Ideally, your accounting software or ERP system should already include an e-invoicing tool.

3. Employee training: The introduction of e-invoicing requires that employees are trained in the new processes. It is important that everyone involved learns how to use the new software and understands how e-invoices are processed.

4. Test phase: Before the changeover is complete, you should carry out a test phase to ensure that all systems work smoothly and that e-invoices are processed correctly.

What are the benefits of e-invoicing?

Regardless of the 2025 legislation, it makes sense to switch to e-invoicing.Here are some of the benefits of switching to e-invoicing:

Increased efficiency: Because e-invoices are machine-readable, they can be processed without manual intervention. This saves time and reduces the risk of errors. This significantly increases the efficiency of the accounting process.

Cost savings: Companies save significant costs on printing, paper, postage and storage. Archiving and storing electronic invoices is much easier. In addition, invoices can be processed and paid more quickly, improving cash flow.

Transparency and security: e-invoices offer greater transparency and traceability as all data is structured and easy to verify. In addition, e-invoices meet high security standards that ensure the protection of sensitive data.

Sustainability: Switching to e-invoicing reduces the use of paper, which is good for the environment. Digitising processes is an important step towards sustainable business.

How does the e-invoice work?

The e-invoice is based on standardised electronic formats optimised for machine processing. Essentially, an e-bill goes through the following steps:

Creation: The invoice is created in a structured format (e.g. XML). This structure ensures that all relevant information, such as invoice number, invoice date, amounts, tax information, etc., is available in a clearly defined format.

Transmission: The invoice is sent electronically. Receipt and processing:The recipient can import the e-invoice directly into their accounting or ERP system. As the data is machine-readable, processing is automatic and requires no manual intervention.

Archiving: Like traditional invoices, e-invoices must be archived for several years.However, this can be done completely digitally, saving paper and storage costs when storing the e-invoice.

What are the legal requirements for e-invoicing?

The legal requirements for e-invoicing are clearly defined and are based on EU Directive 2014/55/EU and the German E-Invoicing Act.

The most important points are:

Formats: E-invoices must be in a structured electronic format.In Germany, ZUGFeRD and XRechnung are common formats.

Transmission: Transmission must take place via secure channels that meet data protection and data security requirements, e.g. via the PEPPOL network.

Content: E-invoices must contain all legally required information, such as invoice number, date, tax rates, amounts and clear identification of the issuer and the recipient.

Storage obligation: E-invoices are also subject to legal retention requirements, i.e. they must be archived in an audit-proof format.

What happens if I don’t use e-invoicing?

Businesses that do not use e-invoicing from 1 January 2025 risk legal consequences.Depending on the country and legislation, this could result in fines or invoices not being recognised and paid.

E-invoicing is already mandatory for companies doing business with the public sector.

Failure to comply can lead to exclusion from tenders. It is advisable to use XRechnung for invoicing public customers, as most public institutions work with this format.

Conclusion