The e-invoice refers to an invoice in electronic form that meets the legal requirements for a proper invoice and is transmitted and stored electronically. In Germany, the provisions of the UStG (German VAT Act), the GoBD and national implementations of the EU Directive on electronic invoicing apply; for invoices to public sector clients certain formats such as XRechnung are mandatory.
What does an e-invoice include and what legal requirements apply?
An e-invoice must generally contain the same mandatory information as a paper invoice. According to § 14 UStG, this includes, among other things, the name and address of the supplying business and the recipient, tax number or VAT identification number (USt-IdNr.), invoice date, period of supply, consideration and the indicated VAT amount.
In addition, technical and organisational requirements must be observed: the authenticity of the origin, the integrity of the content and the legibility must be ensured (GoBD requirements). For invoices to federal authorities, municipalities and other public contracting authorities the use of XRechnung is prescribed (implementation of the EU Directive into national law).
Formats and transmission channels
Several formats have become established on the German market. The choice depends on the recipient, purpose and technical possibilities.
- XRechnung: XML-based standard format, mandatory format for invoices to public contracting authorities.
- ZUGFeRD: Hybrid format (PDF/A-3 with embedded XML), suitable for data exchange between small and medium-sized enterprises and freelancers.
- EDI (electronic data interchange): Direct system-to-system transmission, suitable for high invoice volumes.
- PDF invoice with structured accompanying file: Commonly used in SMEs provided authenticity and integrity are ensured.
Practical application in accounting
The e-invoice significantly changes processes in accounts payable and accounts receivable. Freelancers and small businesses can realise time and cost savings when processes are digitised and automated.
Receipt and validation
On receipt you first check the formal mandatory details (§ 14 UStG) and the format. With XRechnung and ZUGFeRD the embedded XML file can be automatically validated for completeness. Pay attention to:
- Completeness of the mandatory information
- Consistency of the service period with the contract
- Verification of the USt-IdNr. for intra-Community supplies/services
Posting and input VAT deduction
After successful validation the invoice is posted in the financial accounting system. Typical procedure:
- Import the e-invoice (XML/OCR result) into the accounting software.
- Review account coding and record input VAT (if deductible).
- Release payment and link it to the invoice.
Example: You receive a ZUGFeRD invoice for 1,190 EUR (1,000 EUR net, 190 EUR VAT). After verification you post 1,000 EUR to the relevant expense account and 190 EUR as input VAT. On payment the liability is settled.
Archiving and retention
Electronic invoices must be retained for at least 10 years (Fiscal Code / Abgabenordnung, GoBD). Legally compliant archiving is important:
- Immutability of the stored files
- Ensure machine-readability
- Maintain process documentation in accordance with the GoBD
Practical tips and typical use cases
Freelancers and small businesses should consider the following points in practice:
Setup and software
Use accounting software or service providers that support XRechnung and ZUGFeRD. Automated import functions reduce manual entry and error rates.
Invoices to public contracting authorities
When invoicing authorities the XRechnung format must be observed. Failure to comply can lead to rejection of the invoice and payment delays.
Error prevention and review processes
Define internal review processes: who checks the formal correctness, who codes the entry and who authorises payments. Document deviations and corrections to ensure traceability in tax audits.
Risks and compliance
Main risks are incorrect information, inadequate archiving and failure to ensure authenticity. Consequences can include denial of input VAT deduction or tax reassessments. Ensure complete process documentation and regular updates of your software to follow legal changes (e.g. amendments to the UStG or GoBD).
Conclusion: The e-invoice offers significant efficiency benefits but requires correct technical implementation and legally compliant processes. For freelancers and small businesses it is worthwhile to introduce structured procedures and suitable software solutions to save time, increase transparency and minimise compliance risks.