E-Invoicing: What Companies Need to Prepare Now

Since 2025, you need to be able to receive e-invoices. Starting in 2027, sending them will also become mandatory for many companies. We’ll walk you through the deadlines and formats that apply, why a PDF is not an e-invoice, and how to get your processes ready with Microsoft Dynamics 365 Business Central.

What to expect in this article

E-invoicing does not just affect your accounting team. Purchasing, sales, IT, document management, and master data also play an important role. In this article, you’ll learn:

• What an e-invoice is and how it differs from a PDF
• Which deadlines apply in 2025, 2027, and 2028
• Which companies and invoices are affected
• How XRechnung, ZUGFeRD, and Peppol differ
• How Business Central processes e-invoices
• Why you should treat incoming and outgoing invoices as separate projects
• How to test your transition early enough

What is an e-invoice?

An e-invoice is an invoice in a structured electronic format. Its data can be automatically read and processed by ERP, accounting, and document management systems.

A simple PDF does not meet this requirement. Since 01.01.2025, under § 14 UStG, it is only considered a so-called other invoice.

Typical e-invoicing formats include:

• XRechnung
• ZUGFeRD
• Peppol BIS Billing 3.0
• Other formats compatible with the European standard EN 16931

Is a PDF already an e-invoice?

No, a standard PDF file is not an e-invoice. It displays an invoice digitally, but it does not contain fully structured data for automated processing.

One exception is ZUGFeRD: this is a PDF/A file with an embedded structured XML file. That makes the invoice human-readable and machine-processable at the same time.

During the transition periods, standard PDF invoices may still be sent in some cases, but only with the recipient’s consent.

Why is e-invoicing becoming mandatory?

E-invoicing is intended to digitize invoice processes, eliminate media disruptions, and create the foundation for a future electronic reporting system. It was introduced through the Growth Opportunities Act and the revised version of § 14 UStG.

Structured invoice data gives companies clear benefits:

• Less manual data entry
• Fewer transfer and typing errors
• Faster review and approval
• Automatic matching with purchase orders
• Shorter processing times
• Transparent digital workflows

The German Federal Ministry of Finance therefore sees e-invoicing not just as a tax requirement, but also as an important step toward digitizing the economy.

When does e-invoicing become mandatory?

Since 01.01.2025, domestic companies must be able to receive e-invoices. For sending invoices, transition periods apply based on the issuer’s revenue in the previous year.

For 2027, the total revenue of the invoice issuer in 2026 is therefore the deciding factor. You can find the full transition rules in the current FAQ from the Federal Ministry of Finance.

Who does the e-invoicing requirement apply to?

In principle, the requirement applies to invoices between domestic companies, meaning b2b transactions within Germany.

Exceptions include, among others:

• Invoices to private end customers
• Low-value invoices up to 250 euros gross
• Travel tickets
• Many tax-exempt transactions under § 4 No. 8 to 29 UStG
• Invoices issued by small businesses

Small businesses do not have to issue e-invoices themselves, but since 01.01.2025 they must be able to receive e-invoices.

For invoices to public contracting authorities, separate b2g requirements also apply. These may include, for example, a routing ID, specific platforms, or defined transmission channels.

Which e-invoicing formats are allowed?

Allowed formats include, in particular, those that comply with the European standard EN 16931. In Germany, XRechnung and ZUGFeRD are used most frequently.

From version 2.0.1 onward, ZUGFeRD meets the requirements, with the exception of the MINIMUM and BASIC-WL profiles. If there are discrepancies between PDF and XML, since 2025 the data in the structured XML part is decisive.

Peppol is not just a file format. It is primarily a network with technical standards for the secure exchange of electronic documents. Through a Peppol Access Point, companies can send and receive invoices automatically and track their delivery status.

Why are incoming and outgoing invoices two different projects?

Incoming invoices are mainly about review, processing, and approval. Outgoing invoices focus on format, delivery, and customer-specific requirements. That is why both processes need separate responsibilities and testing.

What matters for incoming invoices?

Companies need to clarify through which channels invoices arrive and how they are processed afterward.

• Supported formats and versions
• Email inboxes, portals, interfaces, and Peppol
• Technical and content validation
• Detection of duplicates and fraud attempts
• Matching with purchase orders and goods receipts
• Digital review and approval workflows
• GoBD-compliant archiving

What matters for outgoing invoices?

Outgoing invoices not only need to be formally correct. They also need to reach the right recipient through the agreed channel in the correct format.

• Complete customer and invoice data
• Required format and format version
• Correct recipient address or Peppol ID
• Routing ID for public contracting authorities
• Requirements for attachments and file names
• Technical validation before sending
• Delivery status and handling of rejected invoices

Michael Zettl outlines additional real-world challenges in his article „The Naked Truth About E-Invoicing“.

Why you should not wait until the end of 2026

The technical setup is only one part of the transition. Processes need to be tested with real suppliers, customers, and different business scenarios. If you only get started shortly before 01.01.2027, you risk faulty or rejected invoices and, as a result, delayed payments.

During a pilot phase, you should test cases such as:

• Invoices and credit notes
• Advance payments, partial invoices, and final invoices
• Discounts and different tax rates
• Invoices with attachments
• Customer-specific mandatory information
• Different transmission channels
• Public-sector and private-sector recipients
• Faulty or duplicate incoming documents

Especially for outgoing invoices, e-invoicing also becomes a liquidity issue. An invoice that is technically incorrect or not accepted usually does not just get paid anyway.

How does e-invoicing work in Business Central?

The current German version of Microsoft Dynamics 365 Business Central supports e-invoicing through the integrated E-Documents Framework. This allows XRechnung, ZUGFeRD, and Peppol-based documents to be processed in purchasing and sales.

Business Central offers, among other things:

• Creation of structured e-invoices
• Receipt and processing of incoming e-documents
• Automatic extraction of the XML file from ZUGFeRD invoices
• Separate E-Document Services for different formats
• Customer-specific document sending profiles
• Workflows for sending, review, and status management
• Connection to Peppol service providers

Important: automatically creating an e-document does not automatically create a finished purchase invoice. For that, you need the right configurations, mappings, or purchase order matching. Microsoft describes the current capabilities in the documentation for e-invoicing in Business Central.

Depending on your Business Central version and process setup, additional solutions for document capture, approvals, sending, Peppol, and document management may make sense. Older on-premises versions in particular should be reviewed separately from a technical perspective.

How do you prepare your company for e-invoicing?

A strong e-invoicing project does not start with installing an app, but with a clear assessment of your incoming and outgoing invoice processes.

Our recommendation:

1. Define responsibilities for purchasing and sales
2. Record existing formats, channels, and systems
3. Review your Business Central version and extensions
4. Clean up customer, supplier, and item data
5. Define formats and transmission channels
6. Configure processes in Business Central
7. Run a pilot with selected customers and suppliers
8. Test special cases and error processes
9. Ensure archiving and documentation
10. Train employees and roll out processes in a controlled way

An email inbox that is ready to receive invoices may meet the legal minimum requirement. But it does not replace a functioning digital invoice process.

How does dc support you with e-invoicing?

We support you from process analysis all the way to live invoice exchange in Microsoft Dynamics 365 Business Central. We look at incoming and outgoing invoices separately and connect both with your existing ERP, approval, and document processes.

• Analysis of your current invoice processes
• Selection of the right formats and transmission channels
• Setup of Business Central and additional apps
• Integration of Peppol and document management
• Pilot with real customers and suppliers
• Training and support for go-live

Start your e-invoicing project

Common questions about e-invoicing

Does an e-invoice have to be sent via Peppol?

No. E-invoices can be transmitted, for example, by email, interface, download portal, or Peppol. The specific channel is agreed upon between the business partners.

Do I need a routing ID in b2b?

Generally, no. A routing ID is mainly required for invoices sent to public contracting authorities.

How can I read an XRechnung?

An XRechnung consists of an XML file and requires a suitable visualization. For this, you can use your ERP system or the official e-invoice viewer from the tax administration.

How long do e-invoices need to be retained?

Incoming and outgoing invoices generally must be retained for eight years. For e-invoices, at minimum the structured part must remain unchanged in its original form.

Status: 31.07.2026. This article provides a general overview and does not replace tax or legal advice.