From 2025, companies in Germany must be able to receive e-invoices. A challenge? Yes! But impossible? No!
From January 1, 2025, German companies must receive and process electronic invoices (e-invoices). Error-free and automated incoming invoice processing is the key to success. But how can the changeover to e-invoices be made effortlessly?
Our structured guide will help you to implement your company's e-invoicing obligation (step by step) and successfully digitize your invoicing processes.
Where and how can you start with the introduction of e-invoices? Our compact guide shows you the steps to successfully implementing e-invoices in your company.
Would you like detailed background information on the e-invoicing obligation in Germany, transition periods and other information? You can find all the background information in our first blog article.
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The introduction of e-billing: a guide
So how do I convert or set up my invoice processing for e-invoices? The good news is: with the right steps, the implementation of the e-invoicing obligation can be mastered quite easily. With our five "Guide A's", we show you how you can prepare your company step by step for the e-invoicing obligation.
Step 1 - Analyze: What does your current incoming invoice process look like?
Before switching to mandatory e-invoicing, you need a comprehensive overview of your current incoming invoice process. This is the only way to lay the foundation for smooth digitization of your e-invoice processing.
Key analysis questions if you want to receive e-invoices:
- How are incoming invoices currently delivered to your company?
- How are invoices entered and posted manually? Who is responsible?
- Which systems and software currently support your invoice processing?
- Where do delays or sources of error occur in the invoicing process?
- What invoice information needs to be transferred to your accounting system?
Document your analysis carefully: identify strengths and weaknesses. This will provide you with a solid basis for targeted optimization when introducing e-billing.
Step 2 - Reconcile: Which invoice formats do I need to adapt to?
There are various standardized formats for e-invoices, such as ZUGFeRD or XRechnung. These differ in terms of complexity, distribution and range of functions and basically correspond to the required European format of an e-invoice (ZUGFeRD from version 2.0.1).
XRechnung is an XML-based format that was developed by the European Commission. It is an open and free format that is supported by many companies and governments. ZUGFeRD(Central User Guide Forum for Electronic Invoices in Germany ) is a German format that was developed on the basis of PDF/A-3. It combines the advantages of PDF and XML and offers simple and secure transmission of invoices.
Both formats have their advantages and disadvantages. XRechnung offers greater flexibility and is easier to implement, while ZUGFeRD offers better readability and greater acceptance in Germany.
| XInvoice | ZUGFeRD | |
|---|---|---|
| Format | Structured data (XML) | Hybrid format (PDF/A-3 with embedded structured data/XML) |
| Properties | Machine readable | Human & machine readable |
| Requirements | Public administrations | Economy, Industry & Trade |
| Utilization | Since 11.2020 in the German public sector (B2G) in accordance with ERechV | Cross-industry in the B2B and B2C sectors |
Good to know: For hybrid formats, such as the ZUGFeRD format, which consists of an image file (pdf document) and a structured data record (XML file), the structured part of the invoice will be decisive in future. In the event of a discrepancy, the data from the structured part will take precedence over the data from the image file. We have already integrated the option to process XRechnungen and ZUGFeRD invoices in 2022 with version 9.0 of our invoice processing software Accounts Payable Flow.
Step 3 - Customize: Prepare internal processes for receiving e-invoices
Only if you adapt your internal company processes and structures to the new requirements in good time will you be able to fully exploit all the advantages of e-billing.
You should address the following points in this step:
- Adapt workflows and responsibilities: Review and optimize your existing invoice processing workflows. Define clear responsibilities and approval processes for handling e-invoices. Also ensure that all employees involved are familiar with their new tasks and can perform them efficiently.
- Integration into your accounting system: Integrate e-invoice processing seamlessly into your existing accounting processes. Ensure that incoming e-invoices are automatically transferred to your ERP system for further processing.
- Training and sensitization of employees: Inform and train your employees in detail about the changeover to e-invoices. Explain the new processes and responsibilities to them. Motivate them to actively help shape digitization and take advantage of the benefits of e-billing.
In order to process such electronic invoices efficiently, an appropriate software solution can help. This should be able to automatically record and check incoming e-invoices and transfer them to your accounting system. When making your selection, pay attention to criteria such as user-friendliness, integration capability and scalability.
Step 4 - Try it out: Test the new process and optimize it
Before converting the incoming invoice process to e-invoices, it is advisable to test the new process in a pilot phase first. This allows you to identify any weak points at an early stage and make improvements before you introduce the solution for implementing the e-invoicing obligation company-wide.
- Carry out a test run: Choose a manageable period of time in which you can test the new e-invoice processing process under real conditions. Ask selected suppliers to send you e-invoices and observe closely how your employees handle them.
- Analyze the results: Evaluate the test run carefully. Where were there problems or delays? Where did the process run smoothly? Listen to your employees' feedback and make a note of any suggestions for improvement.
- Optimize the process: Use the knowledge gained to further optimize your e-invoice processing. Adjust workflows, system settings or training measures until the process meets your requirements.
Step 5 - Approach: Motivate your suppliers to use e-invoices
Once you have expanded your internal incoming invoice process to include the processing of e-invoices, it is time to start the general roll-out. This also means informing other process participants about the new features. These include, among others:
- Purchasing
- Customer service
- Internal audit
- Compliance/Regulatory Team
The success of the introduction of electronic invoice processing depends largely on whether all those involved - whether suppliers or your employees - know how to deal with e-invoices and the new processes.
The advantages of the e-bill at a glance
This step-by-step guide will enable you to implement e-invoicing quickly and you will soon be able to benefit from the advantages of receiving and processing e-invoices: Greater efficiency, transparency and cost savings in your invoicing processes.
- Reading out the content using OCR extraction is no longer necessary and the error rate is reduced
- Increased time efficiency thanks to faster throughput times and real-time delivery
- E-invoices are digitally accessible, time-consuming searches are eliminated and a (physical) archive is no longer necessary(but a digital one is!)
- Cost savings through reduction of costs for postage, paper
Process e-invoices with ISR: No problem
At first glance, the upcoming switch to mandatory e-invoicing from 2025 may seem like a major challenge for all companies. However, with the right steps, companies can manage this changeover effortlessly - especially in the area of incoming invoice processing.
With us and our Accounts Payable Flow digital invoice processing software, you have a comprehensive solution for processing e-invoices efficiently and reliably.
Reading and interpreting invoices was and still is a complex process that is simplified by standardized formats such as XRechnung or ZUGFeRD. This structured data, which can be processed digitally immediately, is therefore already available thanks to the e-invoice and "only" needs to be used. And this is exactly where Accounts Payable Flow comes into play:
Accounts Payable Flow makes the entire incoming invoice process more efficient and transparent. In addition to the e-invoice, various invoice formats can still be processed, including PDF invoices, paper invoices, XRechnung, ZUGFeRD, etc.).
Automatic checks and approvals using SmartCoding and competence rules ensure that only correct and authorized invoices are processed further. Posting is partially or fully automated, whereby configurable exceptions can be taken into account. Intelligent search functions, dashboards and reports also ensure comprehensive transparency in the invoice process so that all relevant information can be retrieved quickly and easily. If we have aroused your interest, please contact us and arrange an appointment for a live demo.
Would you like to consider step 5 now (Spread the word) and know someone who is asking themselves the same questions as you? Simply share this guide.
Have we piqued your interest and would you like to find out more right away? Then write to us and make an appointment for a live demo.
Jens Brettschneider
Business Unit Manager
Application Management
jens.brettschneider@isr.de
+49(0)151 422 05 425
