E-Invoicing Basics
Last updated: June 18, 2026
Your solid B2B foundation for the legal mandate in Germany
What is an E-Invoice?
An e-invoice (electronic invoice) is far more than an image-based paper invoice or a simple PDF. Legally, it refers to an invoice issued, transmitted, and received in a structured electronic format that enables automated and electronic processing. It must comply with the European standard EN 16931. You can create new invoices easily or use the validator to inspect received documents.
While conventional PDF files are easily readable by the human eye, they do not contain structured, machine-readable data. They require manual data entry or complex OCR software parsing. A true e-invoice, in contrast, consists of an XML data model where all invoice information is stored in defined data fields (so-called Business Terms or BTs). This allows recipient systems to read, check, and book invoices fully automatically – without media breaks and manual data entry errors.
The Difference: Other Invoices vs. E-Invoices
Previously, paper and PDF invoices were treated equally under tax law as electronic invoices (when sent via email). From January 1, 2025, this definition changes fundamentally in Germany:
| Feature | Other Invoice (Paper, simple PDF) | E-Invoice (XML-based complying with EN 16931) |
|---|---|---|
| Format | Paper, image files (.pdf, .jpg, .docx) | XML structure (e.g., XRechnung) or hybrid PDF (ZUGFeRD) |
| Automated Processing | No (requires OCR or manual entry) | Yes (fully automatic via XML structure) |
| Legal Requirement | No (being phased out step-by-step) | Yes (receiving mandate starting 2025, sending by 2027/2028) |
| Archiving | Analog or manually digitized | Digitally native & audit-proof (GoBD) |
Why now? The European perspective (ViDA)
The introduction of e-invoicing is the first step in modernizing the tax system. Within the EU initiative 'VAT in the Digital Age' (ViDA), a Union-wide real-time reporting system for B2B transactions is planned by 2030. E-invoices form the technical foundation to combat VAT fraud effectively.
The E-Invoice Mandate in Germany – Timeline & Scope
The Growth Opportunities Act (Wachstumschancengesetz) introduces a phased obligation to use e-invoices in domestic B2B transactions in Germany starting January 1, 2025. It affects all transactions between domestic businesses (Business-to-Business, B2B) where both the supplier and the recipient have their registered office, head office, or a permanent establishment in Germany.
It is key to note that the e-invoice mandate does not apply to B2C transactions (sales to consumers). In addition, there are legal exceptions, such as for low-value invoices up to a gross amount of 250 Euros or for travel tickets. Nevertheless, all German freelancers, self-employed, and businesses – regardless of their revenue size (including small businesses / Kleinunternehmer) – must prepare for receiving e-invoices starting 2025.
The Official Phased Timeline of the German E-Invoice Mandate
| Timeline | Receiving Obligation (B2B) | Sending Obligation (B2B) | Transition Rules / Exceptions |
|---|---|---|---|
| From 01.01.2025 | Mandatory for ALL domestic B2B recipients. Every business must be capable of receiving e-invoices. | Until 31.12.2026, sending other invoices (paper/PDF) is still permitted with the recipient's consent. | Transition phase: paper and PDF invoices require recipient consent. |
| From 01.01.2027 | Mandatory for ALL. | Mandatory for B2B senders with prior-year revenue (in 2026) exceeding €800,000. | Smaller businesses (< €800,000 revenue) may still issue other invoices. |
| From 01.01.2028 | Mandatory for ALL. | Mandatory for ALL domestic B2B companies without exception. | Only statutory exceptions remain (e.g., low-value invoices up to €250 gross or travel tickets). |
Special Case B2G: Invoicing Public Authorities
In the Business-to-Government (B2G) sector – i.e., contracts for the public administration of the Federation and many Federal States – e-invoicing has been mandatory since late 2020. The XRechnung format is typically required, and invoices must contain a Buyer Reference (Leitweg-ID) to ensure routing to the correct department. In contrast, a Leitweg-ID is not required in B2B transactions between businesses.
Key Standards and Formate of E-Invoicing
The European standard EN 16931 defines the semantic data model of an e-invoice. It specifies exactly which mandatory elements an invoice must contain and how they must be structured technically. In Germany, two formats have emerged as dominant standard implementations:
1. EN 16931 (The European Standard)
The common European foundation. Any compliant format must satisfy the syntactical and semantic rules of this standard to ensure cross-border compatibility within the EU.
2. XRechnung (The XML Standard Format)
XRechnung is a purely structured XML format without any visual representation. It is the official standard for German public administration (B2G) and is transmitted via web portals or Peppol. Since it is unreadable for humans, it requires visualization software.
3. ZUGFeRD / Factur-X (The Hybrid Format)
ZUGFeRD combines the best of both worlds: a visual PDF/A-3 file for human eyes and an embedded, structured XML file for machine processing. This format is highly popular in B2B because it can be read without special software.
4. Peppol BIS Billing & EDI
Peppol is an international network for securely exchanging e-invoices. Traditional EDI (Electronic Data Interchange) procedures can also continue to be used under certain tax conditions if adapted to EN 16931.
Direct Format Comparison
| Format | Type | Human Readability | Common Use Case |
|---|---|---|---|
| XRechnung | Pure XML (CII/UBL) | No (requires visualization software) | German public administration (B2G), Federal authorities |
| ZUGFeRD (2.0+) | Hybrid (PDF + XML) | Yes (via any standard PDF viewer) | B2B sector, trade, professional services, freelancers |
| Peppol BIS | XML via Peppol network | No (requires software) | Cross-border B2B/B2G transactions, large enterprises |
BT Numbers and Technical Structure of an E-Invoice
To enable automated processing, an e-invoice is structured into logical fields. The European standard EN 16931 designates these fields as Business Terms (BT) and groups them into Business Groups (BG). These are accompanied by Business Rules (BR), which govern logical dependencies and verification rules.
For developers, accountants, and IT managers, understanding these BT structures is crucial. The following overview showcases the key BT numbers relevant to almost every legally compliant e-invoice:
| BT Number | Name (English) | Mandatory | Meaning / Description |
|---|---|---|---|
| General Invoice Information | |||
| BT-1 | Invoice number | Yes | Unique invoice identifier |
| BT-2 | Invoice issue date | Yes | Issue date |
| BT-3 | Invoice type code | Yes | e.g., 380 (commercial invoice), 381 (credit note) |
| BT-5 | Invoice currency | Yes | ISO code (usually EUR) |
| BT-9 | Due date | Conditional (often relevant) | Due date / payment term |
| BT-10 / BT-24 | Buyer reference / Leitweg-ID | No (mandatory for B2G) | Automated routing identifier, especially for public administration |
| BT-13 | Purchase order reference | Conditional | Purchase order or contract reference |
| Seller (Supplier) | |||
| BT-27 | Seller name | Yes | Official company name of the seller |
| BT-31 / BT-32 | VAT ID / Tax number seller | Yes | VAT identification number |
| BT-35 ff. | Address of the seller | Yes | Street, postal code, city, country |
| Buyer (Recipient) | |||
| BT-44 | Buyer name | Yes | Official company name of the buyer |
| BT-48 ff. | VAT ID of the buyer | Conditional (mostly Yes) | VAT identification number |
| BT-50 ff. | Address of the buyer | Yes | Complete address |
| Payment Information | |||
| BT-81 | Payment instruction / payment method | Yes | e.g., bank transfer, SEPA direct debit |
| BT-82 / BT-83 | IBAN / BIC | Conditional (for bank transfers) | Bank details (IBAN / BIC) |
| Invoice Totals & Taxes | |||
| BT-106 | Total amount excluding VAT (Net) | Yes | Sum of all line net amounts |
| BT-109 | Invoice total amount (Net) | Yes | Total net amount |
| BT-110 / BT-112 | Total VAT amount / Gross amount | Yes | VAT amount and total gross amount |
| Invoice Lines | |||
| BT-131 ff. | Invoice lines (details) | Yes (if lines exist) | Individual invoice lines with quantity, price, description |
The complete list of all BTs includes over 200 fields. Those listed here are the most important for most legally compliant e-invoices (EN 16931 / XRechnung / ZUGFeRD). Additional BTs apply for specific industries or B2G transactions.
Additional Useful Fields (depending on context)
- BT-20: Payment terms (cash discount, etc.)
- BT-77 / BT-78: Seller contact details (email, phone)
- BT-92: Payment due date in days
- BT-126: Total allowances/discounts sum
- BT-134 / BT-135: Billing period (for recurring services)
- Tax breakdown per tax rate (BT-116 et seq.)
- Delivery date / Date of performance (BT-7, BT-72 et seq.)
Note: This is not an exhaustive list (the standard contains significantly more fields). The exact status as mandatory or optional can vary depending on the invoice type (B2B vs. B2G), country, and CIUS (e.g., XRechnung).
The Benefits of E-Invoicing for B2B Companies
While transitioning requires initial effort, e-invoicing delivers significant strategic and operational benefits to your company. According to European Commission and chamber of commerce studies, massive savings can be achieved:
1. Significant Cost Savings
Save on paper, printer ink, envelopes, and postage. Studies by the Federal Ministry of Finance (BMF) and the EU Commission show savings of up to 80% in administrative costs (around €10 per invoice) compared to physical mail.
2. Automation & Speed
Invoice data flows directly and digitally into your accounting system. Manual data entry is eliminated, cutting processing times down – invoices are processed, validated, and approved up to 80% faster.
3. Error Reduction
Structured data and formal validation reduce manual transcription errors. Calculations and tax totals remain traceable and should still be reviewed before sending.
4. Compliant Archiving
Organize e-invoices digitally without physical folders. Billance supports local storage, an archive, and backups, while compliant retention and process documentation remain part of your business workflow.
5. Faster Payments
Since e-invoices reach recipients instantly and can be processed immediately, your outstanding payments (DSO) are resolved noticeably faster, strengthening your company's liquidity.
E-Invoice: Features & Guide
With the right software, creating a compliant e-invoice is very simple. Just follow these four steps:
Step 1: Capture Invoice Data
Fill in the standard invoice elements using the invoice designer or invoice creator: seller and buyer details (including VAT IDs), lines, prices, and tax rates.
Step 2: Formal Validation under EN 16931
Billance runs an automatic formal validation in the background to check that all required fields (BT numbers) are present and mathematics match.
Step 3: Generate E-Invoice Format
Choose your format. You can use the converter for importing existing PDFs. For public agencies, generate an XRechnung XML; for commercial partners, a ZUGFeRD hybrid PDF is recommended.
Step 4: Secure Transmission and Archiving
Send the file via email. Store the original XML/PDF file in an audit-proof digital archive and organize it directly in the central invoice management area.
Billance: Compliant E-Invoicing – Easy & Offline
Billance runs as a native desktop app on your computer. Invoice and master data is stored locally and encrypted by default, while cloud sync and AI detection remain optional. Guided required fields and formal validation support your XRechnung and ZUGFeRD workflow.
Frequently Asked Questions (FAQ)
Find answers to the most common questions about the e-invoice mandate in Germany.
Ready for the E-Invoice Mandate?
Start today with Billance. Create compliant XRechnung and ZUGFeRD invoices in minutes – secure, local, and with flexible plans.