E-invoicing obligation 2025: What B2B companies need to consider from January

The e-invoicing obligation is a significant change to the accounting system in Germany. From January 1, 2025, all companies that do business with other companies within Germany must issue and receive their invoices in an electronic format. This applies to B2B transactions and follows the EU directive, which promotes the digital exchange of invoices in order to increase transparency and efficiency.

What is an e- invoice?

An e-invoice (electronic invoice) is an invoice that is created, transmitted and received in a structured, digital format so that it can be processed automatically by computers. It differs from simple PDF invoices or paper-based invoices as it is specifically designed to be automatically integrated into accounting and ERP systems without the need for manual data entry.

Features of an e-invoice:

• Structured data format: The e-invoice is available in formats such as XRechnung or ZUGFeRD, which clearly define certain fields and information (e.g. amount, invoice number, tax data).

• Automated processing: As it is machine-readable, the invoice can be processed directly by software and transferred to accounting and tax systems.

• Legally recognized: E-invoices meet the legal requirements and contain all the legally required elements of an invoice, e.g. tax number, invoice date, delivery date.

Advantages and disadvantages of e-invoices

Advantages

• Time savings and efficiency: Automated processing reduces the manual effort involved in issuing and recording invoices. Faster transmission and processing of invoices can also lead to faster payments.

• Error reduction: As data is transferred directly into accounting and ERP systems, the risk of input errors that can occur during manual processing is reduced.

• Cost savings: No expenditure on paper, printing, postage and physical storage. E-invoices also increase efficiency by shortening processing times.

• Environmentally friendly: A paperless invoicing process helps to conserve resources and supports sustainable business processes.

• Legally compliant: e-invoices comply with legal requirements, which are becoming increasingly binding in many countries.

• Better traceability: Structured electronic storage and linking with IT systems makes tracking and archiving invoices easier and more efficient.

Disadvantages

• Initial investment and implementation costs: Switching to e-invoicing systems can require initial investment in software and training, especially for smaller companies.

• Technical complexity: The integration of e-invoicing solutions into existing ERP or accounting systems can require technical expertise. Differences in file formats (XRechnung, ZUGFeRD) can be a challenge during implementation.

• Dependence on technology: In the event of technical faults or system failures, e-invoices may not be processed or sent on time.

• Data protection and security: Digital invoices must be secured and archived in accordance with data protection requirements (GDPR). This requires additional security precautions to prevent cyber attacks or data loss.

• Acceptance by partners: Not all business partners, especially smaller companies, may be able to receive or process e-invoices immediately, which could slow down the transition.

Transitional arrangements for businesses

From January 1, 2025, e-invoicing will be mandatory for B2B transactions in Germany. Companies will still be able to send paper invoices or electronic invoices in formats such as PDF or JPG in 2025 and 2026, but only with the recipient's consent. Despite this option, from 2025 all companies must ensure that they are able to receive, process and archive e-invoices in an audit-proof manner.

For companies with a previous year's turnover of less than 800,000 euros, the use of paper invoices and non-standardized e-invoices will even remain possible until the end of 2027. Companies that exceed this turnover limit can transmit invoices in EDI format during this period, also with the consent of the recipient.

From 2028, however, all companies will be obliged to switch completely to the e-invoice format in accordance with the European standard EN 16931. At the same time, the legal framework for new reporting systems will be implemented at national and EU level.

E-invoice vs. PDF invoice: these are the differences

The main difference between e-invoices and PDF invoices lies in the format and the way they are processed. E-invoices are created in structured formats such as XML. These formats enable automated processing and direct integration into accounting and ERP systems, minimizing manual input and potential errors. In addition, e-invoices meet specific legal requirements and standards, making them mandatory for B2B transactions from 2025.

In contrast, PDF invoices are digital documents that replicate the layout of traditional paper invoices. They often require manual input for processing, as the data cannot be extracted automatically. PDF invoices can continue to be used until the end of 2024 as long as the recipient agrees. However, they are less efficient and do not meet the requirements of the e-invoice obligation. In summary, e-invoices are intended for automated, legally compliant processes, while PDF invoices must be processed manually and do not meet the same legal requirements.

Create Shopify invoice: These Shopify apps are suitable for e-invoicing

Sufio

Sufio is a user-friendly app that automatically generates compliant e-invoices for B2B and B2C customers. It supports various invoice formats and is tailored to tax requirements in different countries.

Features:

• Automatic creation and sending of invoices, credit notes, receipts and reminders

• Multilingualism

• Tax compliance (incl. EU VAT)

• Invoice customization

Pricing:

• Starter: $7/ month, incl. 15 invoices

• Growth: $19/ month, incl. 50 invoices

• Professional: $49/ month, incl. 5000 invoices

• Premium: $129/ month, unlimited number of invoices

Billbee

Billbee is a tool for automating invoices, order processing and shipping. It is particularly suitable for small and medium-sized retailers who are looking for simple solutions for e-invoicing and order processing.

Features:

• Multichannel order management

• Integration with various store systems and marketplaces

• Incl. e-invoice creation

Pricing:

• Free installation, transaction-based billing (based on processed orders) from €9 (net) per month

Invoice Falcon

Invoice Falcon offers an easy way to create e-invoices directly in Shopify. The app supports various invoice formats and is particularly suitable for companies that require individual invoices and quotes.

Features:

• Fully customizable invoices

• Automated and manual invoicing

• Integrated tax calculations

• Automatic recognition and sending of invoices based on the customer's language

Pricing:

• Pay as you go: free installation, incl. 50 invoices, $9.99/month for unlimited invoices beyond the free limit

• Business: $15/month, unlimited number of invoices

Conclusion

The introduction of mandatory e-invoicing from January 2025 marks an important step towards digitalization and efficiency in accounting for B2B companies in Germany. With clear transition periods and the option of continuing to use existing invoice formats for the time being, companies have time to adapt. The benefits of e-invoices, such as time savings, cost reduction and error reduction, clearly outweigh the initial challenges. By using suitable Shopify apps, merchants can make the transition easier and ensure that they comply with legal requirements.