What is an electronic invoice?

Introduction to Electronic Invoices in the Digital Age 

The concept of electronic invoicing (E-invoicing) receives a fresh definition under the proposed ViDA legislation, marking a significant shift towards structured, electronic formats. Complying with the CEN 16931 standard (Directive 2014/55/EU), E-invoices streamline the entire billing process, from issuance to payment, facilitating a seamless digital workflow.

This means that such invoices can be transmitted, received and processed electronically without media discontinuity and automatically. This enables end-to-end digital processing from the creation of the invoice to the payment of the invoice amounts.

Digital Invoices: Paving the Way for Business Process Automation

Since November 27, 2020, federal suppliers in Germany are mandated to issue invoices electronically for public contracts, a significant milestone towards the digitalization and automation of business processes.

Mandatory E-Invoicing for Domestic B2B Transactions: A Step Towards Digital Transformation

The Growth Opportunities Act introduces mandatory electronic invoicing for domestic business transactions, signaling a move away from traditional paper invoices and PDFs. E-invoices, structured in machine-readable formats, enhance electronic transmission, receipt, and automated processing, offering numerous benefits for issuers and recipients alike.

Transition Timeline to Mandatory E-Invoicing

From 2025: Mandatory reception and archiving of E-invoices by businesses, with exceptions requiring no recipient consent. B2C transactions still require electronic consent.

Until End of 2025: Continuation of paper invoices for B2B transactions is allowed.

Extension for Small Businesses: Up to the end of 2026 for those with a turnover up to EUR 800,000, using paper or alternative electronic formats.

Alternative Formats Until End of 2027: Permissible if electronically transmitted and consented by the recipient.

Strict Compliance by 2028: Only E-invoices that adhere to new standards are allowed.

Benefits for Issuers: Streamlining the Invoicing Process

Efficiency Gains: Simplified and faster invoicing process.

Accelerated Processing: Quicker invoice handling leads to faster payments.

Cost Reduction: Save on paper and postage.

Quality Improvement: Automated invoice creation and validation.

Work Flexibility: Invoice from anywhere, anytime.

Advantages for Recipients: Enhancing Invoice Management

Process Optimization: Automated data entry for invoices.

Improved Data Quality: Reduced error rates.

Cost Savings: More efficient invoice processing.

Flexible Handling: Decentralized invoice management for adaptable workflows.