The e-invoice is coming – slowly but unstoppably

February 20, 2024

The first approaches to digitizing the accounting world stem from EU Directive 2014/55/EU from 2014. The e-invoice that evolved from this has been attracting increasing attention in recent years. An important milestone has been the obligation of invoice issuers in November 2020 to exchange invoices with German administrative units by means of e-invoicing (see PROMATIS blog "XRechnung – another step of "public" digitization"). This standard for B2G (business-to-government) is known in Germany as "XRechnung" (English: "x-invoice"). There are various platforms for the transmission of electronic invoices, such as Peppol (Pan-European Public Procurement OnLine) for the electronic, standardized and automated implementation of cross-border handling in the procurement process. This transmission channel provides the option of mass exporting e-invoices, which can increase the efficiency of invoice processing and thus improve the liquidity of suppliers.

But that was just the first step: digitization continues to progress, and the next milestone awaits just around the corner. A new draft law stipulates that in the future, all companies in domestic German traffic will have to receive and send machine-readable invoices. This means that only e-invoices are to be issued. The federal government is planning to launch the new system on January 1, 2025. The first step is to ensure the receipt of electronic invoices; a transitional period of one year is planned for the creation and sending of invoices. January 1, 2026 at the latest will mark the end of paper or PDF invoices.

The clock is ticking, and for companies, this first of all means an extra effort, as the investment in the adaptation of business processes and software systems has to be planned, implemented and integrated harmoniously and correctly into the overall company processes. Not only is there legal pressure, but many arguments speak for the introduction of e-invoicing and show the long-term positive effects of digitization. The standardized format facilitates the automation of the entire accounting and financial systems. Shorter processing times, a reduction in manual tasks, increased quality and the avoidance of materials such as paper or printers help companies to operate more sustainably. Another key advantage is the avoidance of media disruptions. The previous procedure of creating invoices on paper or as PDFs always harbored a potential for errors, both in handling and in the consistency of data storage. International payment transactions are also simplified, as this standardization strengthens compliance.

Time is running out if a well thought-out and seamless changeover to electronic invoicing needs to be achieved in the company. In doing so, a critical examination of the existing processes is recommended, as entrenched routines can often be modernized and optimized. Based on the results of the analyses, concepts are created that contain both the necessary and proven processes in the company – combined with technical innovations and solutions that ensure efficiency and cost-effectiveness, as well as considering the specific requirements of the company.

The days of the traditional paper invoice are numbered, because e-invoicing is becoming mandatory; that much is certain. The simplification and long-term benefits of digitization in this particular commercial area are of great importance to companies and make things much easier for everyone involved.

Author: Axel Broeker
Image: © oceanng /