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Invoicing the Federal Government in Germany and the XRechnung billing format continue to be fresh topics for suppliers of the government. As of 27 November 2020, it became a legal requirement to invoice the Federal Government – and related administrations – electronically. As a result, many businesses have been scrambling (for more than a year now) to update their means of invoicing.
This short guide will explain everything that you need to know on the topic, including how to invoice the Federal Government yourself.
What Exactly Is An E-Invoice?
E-invoices – or electronic-invoices – are not merely ‘paperless invoices’.
Computers and software process correctly formatted e-invoices automatically. As a result, invoices processing requires fewer workers – and with the right software, e-invoicing can even require no workers!
So PDF or CSV invoices, for example, are NOT e-invoices. They are digital invoices. Digital invoices cannot be processed automatically, despite being paperless. Their purpose is to be read by humans.
The German Federal Government only accepts e-invoice types that use XML language. More specifically, they accept one of two XML languages:
- Universal Business Language (UBL) or
- UN/CEFACT Cross Industry Invoice (CII).
The invoicing software of big administrations can automatically process XML files. That is the purpose of an e-invoice.
What Invoice Format Does The German Federal Government Require?
The German Federal Government currently accepts two e-invoice formats: XRechnung and ZUGFeRD (version 2.1.1). Both of these invoice formats include an XML file in either UBL or CII (explained in the What Is An E-Invoice section of this article).
Here is a little explanation about XRechnung and ZUGFeRD invoice formats:
1. XRechnung Invoices For The German Federal Government
The XRechnung format was developed by a German Federal Government agency (an agency called ‘Koordinierungsstelle für IT-Standards‘, or KoSIT – translating to Coordination Office for IT standards).
The purpose of its development was to ensure that German governmental bodies process invoices in the correct way.
Following the introduction of the European ‘Directive 2014/55/EU’, Germany needed to update its invoicing standards.
Thus, KoSIT developed the XRechnung.
(Click here for more information about ‘Directive 2014/55/EU).
The XRechnung format includes an XML file ONLY, differentiating it from the ZUGFeRD format.
It is the preferred option for the German Federal Government as well as German public authorities and administrations (such as State Authorities and the Deutsche Bahn).
Recipients of XRechnung invoices must be able to process both UBL and CII languages, so that senders of invoices may send either.
For more information about the XRechnung format – including how to create and send it – visit our XRechnung guide.
2. ZUGFeRD 2.1.1 Invoices For The German Federal Government
The ZUGFeRD format was developed by FeRD (“Forum Elektronische Rechnung Deutschland” – which translates to “Forum Electronic E-Invoice Germany”). The purpose of its production was to create a comprehensive and uniform invoice format for all of Europe.
Earlier versions of ZUGFeRD (versions 1.0; 2.0; 2.0.1; and 2.1) are not accepted by the German Federal Government. But version 2.1.1 – launched in July 2020 – is fully compatible with the XRechnung format.
The hybrid-formatted invoice structure is particularly useful for businesses who want to process invoices automatically (with XML invoices) but would also like to read some invoices themselves (in PDF format).
For more information about ZUGFeRD invoices (and how to send or create them), visit our ZUGFeRD guide.
Send invoices to the German Federal Government now — test our Invoice-Portal for free
XRechnung vs. ZUGFeRD: What’s The Difference?
XRechnung uses a single file: an XML file.
ZUGFeRD uses two files: an XML file and a PDF file.
ZUGFeRD 2.1.1’s XML file is compatible with the XRechnung standard. So the difference is: ZUGFeRD uses a PDF file as well as the XML file that XRechnung also uses.
Which Format Should My Company Use For Invoicing The German Federal Government?
As a rule of thumb, you should send B2G invoices in XRechnung format. And, generally, you should send B2B invoices in ZUGFeRD format. So if you are invoicing the German Federal Government, the XRechnung format is best. But if you want to send a ZUGFeRD 2.1.1 file, that will also be accepted.
How Do I Create an XRechnung or ZUGFeRD Formatted Invoice For the German Federal Government?
It is possible to manually create your invoice via the Federal Government’s ZRE submission portal, which they will format for you automatically. To do so, you should sign up to the portal, fill out the ZRE web form, and complete your invoice for free.
However, this is long, tedious work. Especially when you have more than just a few invoices to process. To convert your existing invoices quickly and easily you can use invoicing solution software, such as Invoice-Portal.
From software like Invoice-Portal, you can create, convert, and send (via email, PEPPOL, etc) all of your invoices from within the portal itself.
Check out the Invoice-Portal today!
What Contents Should I Include In My Invoice To The German Federal Government?
According to the Federal Government’s own website, the following contents are required:
1) Buyer reference (or the Leitweg-ID/Routing Identification Number)
2) The due date of payment
3) Bank details of the account to be paid
4) The email (or De-Mail) address of the invoice issuer
5)Purchase order number (or the “Bestellnummer”). This is on your contract document.
ZRE Portal: How to Send Invoices to Germany Federal Government
You can manually send invoices to the Federal Government via the ZRE submission portal. But this method can be time-consuming. You are required to enter all of your invoices’ data manually and in separate, individual invoices.
To save time (and, therefore, money) you can instead use an e-invoicing solution, such as the Invoice-Portal.
Using Invoice-Portal, you can automatically convert invoices into the correct formats and send them to clients – including the German Federal Government – from within the software.
In Conclusion
The new e-invoicing rules might take some getting used to, but they are ultimately going to make everyone’s invoicing systems cheaper and easier. Invoicing the German Federal Government is easy once you figure out the invoicing approach that works best for your business.
Do it now! And then you can focus your energy on the important stuff in your business. If you want a simple invoicing solution, then consider the Invoice-Portal.
If you have any questions about the Invoice Portal, please do not hesitate to contact us
Phone: +49 561-56014568
Email: info@invoice-portal.de
