directive: What companies need to know

In September 2023, the German government took an important step towards digitizing the economy and passed a law on the nationwide introduction of electronic invoicing (e-invoicing) in the B2B sector. With full implementation from 2026, this initiative will bring German companies up to date with efficient invoicing processes. Below you will find out what the directive includes and how companies can prepare for the transition.

The Directive at a Glance

From 2025, companies in Germany will be required to use electronic invoices for B2B transactions. The system is based on the PEPPOL (Pan-European Public Procurement Online) standard, specifically version 2.2, a Europe-wide recognized framework that ensures seamless interoperability and compliance with EU standards.

The introduction takes place in two clearly defined phases:

Phase 1: Voluntary e-invoicing (January 2025–December 2025)

During this transition phase, companies can voluntarily submit invoices electronically in the PEPPOL standard. Paper-based invoices will continue to be accepted. The aim of this phase is:

• To enable companies to gradually adapt to the new processes.
• To provide time to implement or update the necessary systems and train employees.
• Identify and resolve technical challenges before mandatory implementation begins.

Phase 2: Mandatory e-invoicing (from January 2026)

From January 2026, electronic invoicing will be mandatory for all B2B transactions. Important aspects of this phase are:

• All invoices must be submitted electronically; paper-based formats are no longer permitted.
• ZUGFeRD (a simplified e-invoicing standard developed specifically for the German market and compatible with PEPPOL BIS 2.2) is also accepted, offering companies a Germany-specific alternative.

Why e-invoicing?

The switch to electronic invoicing is in line with global digitalization trends and offers numerous advantages:

• Efficiency: Faster processing of invoices and less administration effort.
• Cost savings: Less effort for paper, printing and shipping.
• Compliance: Greater accuracy and lower risk of errors or fraud.
• Sustainability: Less paper consumption supports environmental goals.

preparation for the directive

To ensure a smooth transition, companies should start preparing early. The following steps are recommended:

1. Check systems: Check existing invoicing systems for compatibility with PEPPOL BIS 2.2 or ZUGFeRD.
2. Introduce e-invoicing solutions: If necessary, invest in software or platforms that meet the new requirements.
3. Employee training: Train your employees in the use of new e-invoicing tools and compliance requirements.
4. Conduct system tests: Use the voluntary 2025 phase to test the e-invoicing process, identify challenges and make adjustments.
5. Collaborating with partners: Make sure suppliers and business partners are informed and prepared.

Conclusion

The nationwide introduction of B2B e-invoicing in Germany marks a decisive step towards the digital transformation of the business world. Even if the transition requires initial investments in technology and training, the long-term benefits in terms of efficiency, cost savings and sustainability outweigh the disadvantages. Companies that prepare now will be well equipped to successfully manage the changes and benefit from an optimized invoicing process.

Keep up with the times and get ready for the digital future of invoicing!

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