Digitalisation olé! Tedious scanned paper invoices or manually typed Excel invoices have become history – since January 2025, when the Growth Opportunities Act (Wachstumschancengesetz, WCG) 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 for certain: it is the next logical step in the digitalisation of business processes.
We have summarised what these new regulations imply for accounting, how companies can significantly cut costs thanks to online invoicing, and which software makes the shift from paper to e-invoices easier.
Key aspects
What is an e-Invoice?
An e-invoice is an invoice in a structured, machine-readable format (e.g. XRechnung or ZUGFeRD) that enables automated processing.
E-invoice (also referred to as electronic invoice, e-invoicing, or electronic invoicing) refers to the digital exchange of invoice data between business partners. This excludes scanned paper invoices. Even though a PDF can be sent digitally, it 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 of the 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 WCG 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, then saves them as PDFs before sending. E-Invoicing reduces manual steps and optimises digital processing – from issuing to archiving invoices:
Besides the potential for increased efficiency and fewer errors, e-Invoicing also offers other benefits for your business account and the environment:
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.
Quick overview: obligation & deadlines
Programs for creating e-Invoices
Microsoft Excel and Word are primarily designed for calculations and word processing. Fortunately, there are now more suitable 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 handy features 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.
This kind of innovation is still rare among business bank accounts, but free access to such tools helps reduce costs. This is especially important for small and medium-sized enterprises and freelancers who are looking for solutions that support the implementation of the mandatory e-invoicing requirements.
Please note: The legal and regulatory requirements described in this article apply to the German market as of July 2025. As this may change over time, make sure to check the latest information.
Frequently asked questions about digital invoicing
How can e-invoices be issued?
E-invoices are created using specialized software that supports structured, machine-readable formats such as XRechnung or ZUGFeRD. Depending on the software used, more or fewer data fields may need to be provided for an invoice. The legal requirements for compliance with the Growth Opportunities Act (Wachstumschancengesetz, WCG) are set out in Section 14 of the German Value Added Tax Act (UStG) and are binding for companies in Germany.
Once the invoice file is created, it can be sent, for example, as an email attachment. Modern business accounts simplify this step, for example with a built-in invoice tool. Another option is a payment link, allowing customers to securely pay the invoice online in line with data protection regulations.
How can e-invoices be paid?
E-invoices can be paid as usual via bank transfer or direct debit. E-Invoices also offer a major advantage: automation. Check whether your bank account already has a tool like Vivid Business’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 e-invoicing obligation also applies to cross-border B2B transactions within the EU. Thanks to unified standards, the automated processing of invoices between companies in different countries is made easier.
Modern financial platforms 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 can vary from country to country. In addition, there may be further tax and reporting obligations when operating internationally. Companies must ensure that their invoice formats are compatible and, where applicable, comply with reporting requirements—for example ViDA (VAT in the Digital Age). To ensure compliance, it’s best to proactively gather information or contact the support team of the respective bank.
Why does e-invoicing exist?
E-invoicing was introduced to promote the digitalisation of public administration and to combat VAT fraud. Structured, machine-readable invoices enable tax authorities and businesses to review and process data more efficiently. The Growth Opportunities Act (Wachstumschancengesetz, WCG) is Germany’s implementation of an EU-wide digitalisation strategy and is intended to strengthen the competitiveness and future viability of the economy.
Does e-invoicing also have disadvantages?
E-invoicing mainly comes with organisational requirements, but only a few disadvantages. Companies must ensure that invoices are created correctly, archived properly, and protected in compliance with the GDPR. At the same time, integrated solutions significantly reduce manual effort and minimise risks related to VAT deduction and tax audits. Without suitable software, the transition may initially involve additional costs. For this reason, it is advisable to choose a business bank account that already includes an integrated e-invoicing feature.
What transitional deadlines apply to e-invoicing?
For a gradual transition, invoices issued after 1 January 2025 may be sent as follows:
- Until 31 December 2026: paper invoices are still permitted; electronic files such as PDFs are only allowed with the consent of the recipient organisation
- From 1 January 2027: only e-invoices are permitted if the previous year’s turnover exceeds €800,000
- From 1 January 2028: only e-invoices are permitted for all companies, regardless of their previous year’s turnover
What happens if I do not comply with the e-invoicing obligation?
Not complying with the e-invoicing requirement can have negative tax consequences. Invoices that do not meet the legal requirements may be rejected by the tax authorities. In such cases, the deduction of input VAT may be denied. In addition, companies may face follow-up queries, delays in audits, or—in individual cases—fines. Businesses should therefore ensure that they are able to receive and issue e-invoices.
Does the e-invoicing obligation also apply to established companies and corporations?
Yes, the e-invoicing obligation applies to both new and established companies and corporations. There are no exemptions based on company size or industry. This means that all businesses, regardless of their size or line of business, must ensure that they are able to create and issue e-invoices.
Are there any exceptions to the e-invoicing requirement?
Yes, certain invoices are exempt from the e-invoicing obligation. These include small-value invoices up to €250 as well as certain tickets, such as those for public transport or parking. In these cases, paper invoices or PDFs may still be used, which is particularly relevant for small businesses and freelancers.
Is a PDF invoice valid?
Yes, a PDF invoice can still be tax-valid—however, it does not qualify as an e-invoice. PDFs are not machine-readable and therefore do not meet the requirements of the Growth Opportunities Act. In the B2B sector, structured formats such as XRechnung or ZUGFeRD will be required in the future for an invoice to be recognised as an e-invoice.
Can I still request a paper invoice or a PDF once the Growth Opportunities Act takes effect?
Only to a limited extent. During the transitional periods mentioned above, paper invoices and PDFs may still be used. After these periods expire, however, there is no longer any entitlement to them. Companies must then be able to accept and process e-invoices, unless a statutory exception applies.
