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XRechnung is a German e-invoicing format standard.
The standard was created as part of the worldwide shift away from paper invoicing towards electronic, paperless invoicing.
What’s wrong with paper invoicing? Well, paper invoicing is extremely expensive compared with e-invoicing and it is also bad for the environment.
It is estimated that the switch from paper invoicing to e-invoicing will save the global economy up to €6.5 billion per year … yes, that is per year!
Moreover, the amount of trees that are felled in order to produce the paper necessary for invoices is simply too big of a number.
Therefore, majority of countries are now obligating companies to process e-invoices rather than paper ones.
So if you aren’t e-invoicing already, and you want to send invoices to Germany, then read on! There is a high possibility that you need to know more about the XRechnung format.
Navigation Links/Contents
3. Why Is XRechnung Necessary?
4. What Are The Requirements of XRechnung?
– XML
5. Do I need to Use XRechnung?
– What Happens If I Don’t?
– Are There Any Alternatives?
7. Can I Create an XRechnung for Free?
8. How Do I Create an XRechnung?
9. What Does an XRechnung Look Like?
10. How Can I Read an XRechnung?
11. How Do I Send an XRechnung?
What is XRechnung?
The XRechnung format is an e-invoice format that has been created by the German Coordination Body for IT Standards (KoSIT).
The development of the format was in reaction to the implementation of ‘Directive 2014/55/EU of the European Parliament and of the Council’.
This European directive’s basic aim was to create a Europe-wide e-invoicing standard — and standard which they named ‘EN-16931’.
Before the introduction of this directive, dozens of countries each used different formats. This meant that companies had to convert internationally-received invoices into the standard that their own administrators were familiar with.
Such processes were lengthy and prone to administrative errors, costing everybody involved more time and more money.
That’s the main reason why the ‘Directive 2014/55/EU of the European Parliament and of the Council’ was implemented.
And an XRechnung invoice is, basically, a German standard based upon this new European legislation designed for e-invoicing German public authorities/government agencies.
What Does XRechnung Mean?
XRechnung, a German term, translates directly to ‘X Bill’, or ‘E-bill’ (or x-invoice/e-invoice).
But when we talk about ‘XRechnung’ (in English, German, or any language) we aren’t talking about any sort of e-bill, or e-invoice. We are talking about a specific kind of e-invoicing format.
The XRechnung format is a standard that the German federal government introduced in November 2020.
Since November 2020, it is now obligatory for anybody invoicing German governmental bodies to do so using the ‘XRechnung’ invoicing standard (or format).
Why is XRechnung Necessary,
if the EU Already Has An Invoicing Standard?
Each country has its own unique requirements when it comes to invoicing.
The most obvious example of this is tax: each country has its own, unique taxing system – and therefore, unique tax identification systems.
For reasons such as this, it wouldn’t be possible for a single invoicing standard to cover the specific needs of every specific country.
And that is why XRechnung is necessary despite the E.U’s e-invoice standard ‘EN-16931’.
The XRechnung is Germany’s Core Invoice Usage Specification (CIUS). And every country uses a type of CIUS, compatible with EN-16931, as its invoicing standard.
What Are The Requirements of The XRechnung Format?
The XRechnung standard requires that your e-invoice be structured in one of two XML-formats: UBL (Universal Business Language) or CII (UN/CEFACT Cross Industry Invoice).
That probably sounds complicated if you are not in the know. Let us explain.
XML
XML (extensible markup language) is a set of codes that describe the text of documents to computers.
To put it simply, XML is a language that computers can process automatically.
XML-formatted invoices, then, are invoices that are readable for certain computer systems.
This is beneficial for organisations that process high levels of invoices because computer-readable invoices can be processed automatically – requiring less staff, time, money, and resources.
German Federal governments and public authorities are perfect examples of such organisations; and that is why the XRechnung standard was implemented as compulsory.
XML-formatted invoices, it should be noted, are NOT readable by most humans.
They are only readable by computers and by people who are trained to read such language.
So don’t worry if all of this seems a bit confusing.
Types of XML-Format Valid for XRechnung
UBL (Universal Business Language)
Universal Business Language (UBL) is an OASIS specification for standardised e-invoices.
UBL uses XML and is based on the ebXML Core Components.
CII (UN/CEFACT Cross Industry Invoice)
The Cross-Industry Invoice (CII) was developed by the UN/CEFACT (United Nations Centre for Trade Facilitation and Electronic Business).
It is a language developed for e-invoicing, considered a universal standard alongside UBL.
XRechnung Format
To summarise this section:
The XRechnung format is a structured, standardised data record in XML-format that can be sent/processed electronically and, therefore, automatically.
The two XML ‘syntaxes’ permitted for XRechnung are: Universal Business Language (UBL) and UN/CEFACT Cross Industry Invoice (CII).
You can create XRechnung quickly and easily using our Invoice-Portal.
Try it now for free 14 days!
NO AUTOMATIC RENEWAL !
ALL FUNCTIONS USABLE !
Do I Need To Use XRechnung?
You will need to use XRechnung if you are sending an invoice to any of Germany’s federal government or public authorities – it is now a legal requirement in Germany.
So, if you are sending invoices to any German government agency, then you don’t have a choice – there are no exceptions and you should convert your invoices now!
You may also need to use XRechnung if you are sending invoices to a German company.
However, it is also possible that they request you to use the ‘ZUGFeRD’ format.
For more information on the difference between ZUGFeRD and XRechnung, skip to the ‘XRechnung vs. ZUGFeRD‘ section of this article.
In the vast majority of cases, XRechnung is the format preferred for B2G invoice exchange in Germany; and, in most cases, ZUGFeRD is the preferred format for B2B invoice exchange.
To find out for certain what invoicing standards your client accepts, simply contact them. They will give you the specific information that you need.
You can learn more about ZUGFeRD invoices right here.
What Happens If I Don’t Use XRechnung?
If you don’t use the XRechnung format when invoicing a German government agency, your invoice will be rejected. And that means you won’t get paid.
After that, you will be required to file another invoice in the XRechnung format.
So do yourself a favour! And format your invoice correctly the first time around.
Are There Any Alternatives?
It is now technically possible for you to submit to some German government agencies using formats other than XRechnung.
Some agencies will accept ZUGFeRD 2.1.1 (as this invoice’s XML file is compatible with XRechnung); and some will accept other XML-formats (written in UBL or UN/CEFACT Cross Industry Invoice) if they are compatible with EN-16931.
However, not all agencies will accept these alternatives.
Many agencies prefer invoices to be filed in a single, XML-format – as is the case with XRechnung – and do not accept ZUGFeRD’s two-file invoice or similar.
Therefore, if you are submitting invoices to German government agencies, or to federal or public authorities, then you probably need the ability to convert your invoices into the XRechnung.
If you want to achieve the creation of XML-formatted XRechnung invoices, then you are welcome to test our Invoice-Portal for free.
And with the Invoice-Portal, your invoices will be automatically converted into any format that you select – not only for Germany’s XRechnung, but international invoices, too.
Can I create XRechnung for free?
There are three possibilities here:
1. ERP/CRM Systems
If you already have an ERP (Enterprise Resource Planning) System/software, or a CRM (Customer Relationship Management) system/software, that processes invoices for you then it might be possible to convert your invoices into the appropriate XML-format through those.
However, many ERP and CRM systems currently lack that capability.
It seems likely that systems will update at some point, given the increased necessity for data-based e-invoices nowadays … but many haven’t done so, yet. Keep an eye out for updates on your current ERP system!
2. Write Your Own XML
If you are skilled in writing in XML – specifically in UBL or UN/CEFACT Cross Industry Invoice (the only two accepted XML formats for XRechnung invoices) – then you can, of course, write your own XML-format invoices.
However, most people are not skilled in this – and most business owners don’t have time to learn such things.
3. Invoice Portal
Another option for creating XRechnung for free, if you only need to send a small number of invoices, is by using the Free Version of Invoice-Portal.
There is a limit to the number of invoices you can create. But if it is only a small number then you should be fine with the free version.
You can create XRechnung quickly and easily using our Invoice-Portal.
Try it now for free:
What Does An Example of an XRechnung Invoice Look Like?
Here are a couple of examples of what an XRechnung looks like to a human:
As this article has already described, XRechnung invoices are not meant to be read by humans (thank goodness!).
But to the right software (which XRechnung recipients must always use), this is as easy to read as a pre-school picture book.
How Do I Send an XRechnung?
There are 5 ways you can send XRechnung invoices – 3 of which you can do automatically through the Invoice-Portal.
Before deciding, though, make sure you are aware of what your recipient’s preferences are.
(Find information about the German public authority you are invoicing here).
1. Email
If you have your recipient’s email address then it is possible to send the document directly to them.
You can easily do this using our Invoice-Portal, too.
If you want to send invoices via email, click the ‘Send’ button on the top right and select the email option there:
If you have your recipient’s email address then it is possible to send the document directly to them.
You can select this option in the Invoice-Portal’s top right ‘settings’ icon, and select the email option there.
This is sometimes the preferred for smaller organisations who don’t process enormous numbers of invoices.
However, larger governmental bodies often prefer that you send their invoices through a more automated platform (such as PEPPOL, which will be the next option covered in this article…)
Again, check our list of public authorities to see how they want their invoices sent.
2. PEPPOL
Public authorities are increasingly turning to the PEPPOL network for invoice exchange.
Registered users of the PEPPOL network can send and receive invoices to each other easily and securely.
If you use our Invoice-Portal, you automatically have PEPPOL access.
And if you are using the Invoice-Portal, you can easily select the PEPPOL option in the dropdown menu in the top right of the portal under the ‘Send’ button. This picture will demonstrate:
PEPPOL boasts a number of advantages. For example:
The network offers far more security than emails.
Invoices can be processed automatically (which bodies processing large numbers of invoices love!).
And it seems like the PEPPOL network, despite its slow growth, could be the future of e-invoicing.
Webware24, Invoice-Portal’s parent company, is a certified PEPPOL Access Point.
If you want to test PEPPOL’s benefits for yourself, take advantage of the Invoice-Portal’s free version.
3. ERP or CRM System
You can send invoices through your ERP or CRM system, if the software includes that function.
Sadly, many of these systems do not give the option to both send and receive invoices in the appropriate standards.
To learn whether or not your system has such a feature, contact your supplier directly for further instruction.
If they don’t, then contact us! And we can help you to process your invoices correctly, AND to send them automatically through your ERP/CRM system.
4. Web Form
Some of the German public authorities used to give the option for you to submit invoices directly to them, using their websites’ own forms.
But, due to the process involved in creating XRechnung invoices, this is now a far less common method.
5. Manual File Upload
A few of the German public authorities offer the option of uploading documents directly to them via their web portal.
This is usually one option alongside the option to send your invoice via PEPPOL and/or email, therefore being a far less common method of choice among creators and senders of XRechnung invoices.
What is a Routing Identification Number (Route ID), or a ‘Leitweg ID’?
A Leitwig-ID identifies senders and receivers of e-invoices in Germany.
The ID’s structure has company/authority addresses built into it:
As you can see…
The first two digits indicate Federal State;
The third digit indicates government district;
The 4th and 5th digits indicate district;
The 6th, 7th, and 8th digits indicate municipality;
‘-‘ is the 9th digit;
The 10th, 11th, 12th, 13th, and 14th digits indicate fine addressing;
And finally, the 15th and 16th digits are ‘check digits’.
A Leitweg-ID is not mandatory for German issues of invoices. But that may be the case in the future.
And, of course, the Leitweg-ID is not necessary for non-German companies/institutions.
Also, if you have a PEPPOL ID, you don’t need a Leitweg-ID.
