E-invoicing: What entrepreneurs should know now

As of November 27, 2020, federal authorities will only accept electronic invoices from their suppliers. State and local governments are also switching over.

This article is part of the special feature "E-Invoicing: Tips for Craft Businesses".

Until November 26, tradespeople and other companies that work with federal public clients or federal authorities can still send their invoices in the traditional way, either on paper or by fax.

Electronic invoicing and transmission will become mandatory from November 27, 2020. This applies, for example, to invoices to employment agencies, tax offices, the police, the armed forces, customs offices, universities, and other federal institutions. Only invoices with a value of up to €1.000 are exempt.

The e-invoice must be created in a specific structured format and allow for automated processing. A simple PDF document or a scanned paper invoice as an email attachment is not sufficient and may be rejected by the authorities.

Challenge for small and medium-sized enterprises

Invoices to federal authorities can be created, digitally uploaded and sent via the federal government's central invoicing portal (ZRE) in the standardized XRechnung format.

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The invoice issuer must register once for this to work. Alternatively, sending via email and using other standards such as ZUGFeRD is also possible.

For many companies, especially smaller ones, this transition is a challenge. According to a survey by the digital association Bitkom, a third of companies still create their invoices predominantly or exclusively in paper form.

Tips for e-invoicing: The digital association Bitkom has compiled ten key points for e-invoicing . These tips are aimed primarily at small and medium-sized enterprises.

E-invoicing is also playing an increasingly important role at the federal states and municipalities, although there are different regulations in this area. What they have in common is that since April 2020, the states have been required to offer e-invoicing portals and accept electronic invoices.

There is currently no general obligation to issue electronic invoices. However, public contracting authorities in Rhineland-Palatinate and North Rhine-Westphalia are already free to contractually agree to such an obligation.

The introduction of e-invoicing stems from an EU directive . This is intended to strengthen cross-border trade within the European single market.

30 percent of German companies use e-invoicing

Nils Britze, Head of Digital Business Processes at Bitkom, says: "A lot has happened in Germany in the past two years: While 19 percent of companies used e-invoicing in 2018, this year the number has risen to 30 percent. It is important that all other companies also address this issue now."