Simplifying finance: the shift from paper to e-Invoicing
Digitalisation olé! Tedious scanned paper invoices or manually typed Excel invoices are soon becoming a thing of the past – since January 2025, the Growth Opportunities Act (Wachstumschancengesetz, WCG) has introduced a comprehensive e-invoicing mandate for businesses in Germany. For some, the new machine-readable format has quickly become the norm, while other teams are still working on transitioning to the new standard. One thing is clear: this is the next logical step in the digitalisation of business processes.
We have summarised what these new regulations mean for accounting, how companies can significantly cut costs thanks to online invoicing, and which software makes the shift from paper to e-invoices easier.
Summary:
- Key points
- What is an e-Invoice?
- Formats of e-Invoices
- Benefits of electronic invoicing
- Who is affected by the e-Invoicing mandate and when?
- Programs for creating e-Invoices
- Frequently asked questions about digital invoicing
Key points
- PDFs are not considered e-Invoices
- E-Invoices contain structured data that can be processed automatically
- The common formats for electronic invoices in Germany are XRechnung and ZUGFeRD
- Creating an e-Invoice requires specialised software
- There are individual software solutions as well as business accounts with integrated e-Invoicing software
- E-Invoicing has been mandatory for German companies since 2025, though transitional periods still apply
What is an e-Invoice?
Electronic invoicing (e-Invoicing) refers to the digital exchange of invoice data between business partners. This means scanned paper invoices are not included. Even though a PDF can be sent digitally, it still does not meet the e-Invoicing principle because it is designed to be read by people and processed manually.
For an invoice to qualify as an e-Invoice, it must be in a structured data format that allows automated processing. The legal requirements include information such as addresses, tax numbers, goods or services, and the total invoice amount including tax.
These detailed requirements are set out in Section 14 VAT Act. Modern e-Invoicing software organises all necessary data hierarchically, using formats like Extensible Markup Language (XML) or Universal Business Language (UBL). This hierarchical structure makes the data machine-readable.
Formats of e-Invoices
The Growth Opportunities Act follows the European directive and currently recognises two formats as e-invoices: XRechnung and ZUGFeRD.
XRechnung is a pure XML file without visual layout and requires specialised software to view comfortably as it can be hard to read for the untrained eye.
In contrast, ZUGFeRD combines structured XML data with a visible PDF component, which is why it is called a hybrid format. This allows both humans and machines to easily read the invoice.
Benefits of electronic invoicing
Maybe your team still creates invoices in Microsoft Excel or Word, saves them as PDFs, and sends them that way. E-Invoicing reduces manual steps and optimises digital processing – from issuing to archiving invoices:
- Elimination of time-consuming manual errors
- Automatic processing and direct import into accounting software
- Complete traceability thanks to electronic storage
Besides the potential for increased efficiency and fewer errors, e-Invoicing also offers other benefits for your business account and the environment:
- Savings on materials and postage (no more paper, printing, postage)
- Savings on tax advisor fees (faster digital access)
To sum up: e-Invoicing makes the invoicing process faster, safer, and more sustainable – valuable advantages for companies of all sizes.
Discover more about e-invoicing with a business account here.
Who is affected by the e-invoicing mandate and when?
Since January 2025, it has been mandatory for all companies trading within the EU to issue e-Invoices. The new standard applies to invoices addressed to businesses and public authorities alike, covering the entire business-to-business (B2B) sector.
In fact, the Growth Opportunities Act also provides transitional periods. Depending on the previous year’s turnover, companies have until 1 January 2028 to implement e-invoicing and train their teams.
Programs for creating e-Invoices
Microsoft Excel and Word are primarily designed for calculations and word processing. Fortunately, there are now many other software solutions to help meet the new legal requirements and facilitate the transition from paper invoices to the digital standard.
Most of these tools not only support creating e-invoices but also offer practical functions for sending, storing, and tracking invoices. Alongside accounting tools like DATEV or Lexware Office, many neobanks now offer invoicing and accounting functions integrated into their business accounts, so everything can be viewed on a single platform.
Vivid Money has developed an easy-to-use solution for companies and freelancers wanting to speed up their financial management without getting bogged down in complicated software. Its digital business accounts already include a powerful AI tool for e-invoices. On top of that, features for monitoring outstanding payments and sending reminders are included. This kind of innovation is rare in business account offerings: free access to these tools saves costs, which is especially important for small to medium-sized businesses and freelancers.
Frequently asked questions about digital invoicing
How can e-invoices be issued?
Depending on the software, more or fewer details may be required for an invoice. To comply with the WCG, invoices should include at least the information listed in Section 14 VAT Act.
Once the invoice file is created, it can be sent, for example, as an email attachment. With a Vivid business account, this is very straightforward within the invoice tool itself. This way, all invoices are managed in one place and quickly and correctly delivered. Another option is a payment link, allowing customers to securely pay the invoice online.
How can e-invoices be paid?
Recipients usually pay e-Invoices by bank transfer or direct debit as usual. E-Invoices also offer a major advantage: automation. Check whether your bank account already has a tool like Vivid Money’s "Bill Pay" feature, which can automatically read and process incoming invoices. Within a few clicks, payments can be processed efficiently.
For scanning receipts and paper invoices, apps like GetmyInvoices help automate these processes and improve payment handling efficiency.
Is e-Invoicing valid internationally?
Yes, the legal requirements for mandatory digital invoicing affect not only national business but also international trade relations. Unified standards facilitate automated processing of invoices between companies across different countries.
Modern financial platforms like Vivid already provide key European languages such as English, Spanish, French, and German for online invoicing. Users can easily switch languages in profile settings.
However, invoicing abroad is subject to specific tax and regulatory requirements that vary by country. Besides legal requirements, companies must ensure that the invoice format used, such as XRechnung or ZUGFeRD, is compatible with national systems. Reporting obligations may also apply for cross-border invoices, for example, within the EU’s ViDA (VAT in the Digital Age) programme. It is advisable to seek information proactively or contact the support of the respective bank.
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