From January 2025, electronic invoicing (e-invoicing) will be mandatory in B2B business. But what exactly does the e-invoice mean for companies? How can they best prepare for the new regulation? What regulations need to be observed? Which processes will change? And why is an e-invoice more than just a simple PDF document sent by e-mail?
Sebastian Bourne is the specialist for digital processes. In the following interview, Sebastian Bourne answers important questions about electronic invoicing.
Sebastian Bourne, what is an e-invoice?
Sebastian Bourne: From 01.01.2025, the electronic invoice is a structured and electronic data record in XML format. This is created in software and, ideally, also sent directly by email. The aim is to process the invoice completely electronically. Sounds simple, is simple! However, it cannot be implemented without software support, whereby software here does not mean a writing or spreadsheet program such as Microsoft Word or Excel or similar.
The basis for electronic invoicing was created by a European standard, which all member states must implement. We in Germany are quite late, because in France, Italy, Poland, Spain, Portugal and other countries, electronic invoicing has already been implemented and introduced nationwide.
The basis for electronic invoicing was created by a European standard, which all member states must implement. We in Germany are quite late to the game, because in France, Italy, Poland, Spain, Portugal and other countries, electronic invoicing has already been implemented and introduced nationwide.
Anyone in the landscaping industry who already works with public clients such as municipalities, city councils, federal and state governments will already be familiar with the Xinvoice.
CEN 16931 standardizes the basic structure of what information must be included in the XML file. The sequence and names of the data fields are kept in English for internationalization.
According to current opinions and technical implementations, not only the pure XML dataset will be accepted, but also the hybrid ZUGFeRD format, which represents a PDF/A-3 file with the XML dataset and can therefore be processed digitally. In this case, the PDF/A-3 is not the actual invoice, but only a construct for the transition period.
Why is e-invoicing being introduced?
Sebastian Bourne: There are different, often very emotionally debated approaches as to why electronic invoicing has now been introduced by law via the Growth Opportunities Law.
But let's get away from the "why" and the negative aftertaste!
Electronic invoicing represents an enormous opportunity for everyone, including gardening and landscaping companies. Invoices with incorrect content, invoices created using a typewriter or handwritten on a receipt pad are procedures that unfortunately still occur too often - even in 2024.
The opportunities include:
- error-free invoices that meet minimum requirements
- Invoices issued on time
- Traceability in the creation (who, when, where) and amendment of invoices
- Active dunning process
- No more travel time to the tax consultant's office because the receipts are transferred digitally
- VAT fraud and undeclared work are reduced
- Sustainability and environmental protection
For which reason, electronic invoicing is now being implemented in your company: It is very important to me that you and your team recognize these and other opportunities and therefore start the implementation with motivation.
Which companies are affected?
Sebastian Bourne: Every company and therefore every GalaBau company is affected, including the subcontractors commissioned by you, your dealers, every manufacturer and all clients as well as all invoice recipients, provided they are not private customers.
I will explain in a moment whether you and your company will also have to use electronic invoicing from 01.01.2025, i.e. write and send invoices. However, a deadline must not and should not be your "motivation". Set your company up for a secure and predictable future! Start with your team and the use of electronic invoicing in all areas from 01.01.2025!
What are the deadlines?
Sebastian Bourne: From 01.01.2025, your business must be able to receive e-invoices. This means that you will either need tradesman software or that your accounting software must be able to do this.
So check whether your accounting software can do this and find out from the provider of your tradesman software when and how incoming invoices can be read out.
From 01.01.2025 to 31.12.2026, you need the consent of the invoice recipient that they agree to a form other than the electronic invoice. You should ensure this in writing if you want to use a form of invoice other than the Xinvoice or ZUGFeRD format.
This deadline is extended until December 31, 2027, if you generate less than 800,000.00 euros in turnover with your business in 2026 and the invoice recipients continue to agree to this.
From 01.01.2028, your GaLaBau company must then have fully implemented CEN 16931 and thus the Xinvoice.
What are the technical requirements?
Sebastian Bourne: From 01.01.2025, invoices may no longer be created using a typewriter, handwriting, Word or Excel-like programs. Because Xinvoice and ZUGFeRD invoices are digital files, they must be sent by email or uploaded to portals.
If you have other paper-based workflows and documents, the next step is to find a craftsman software that will make e-invoicing available for invoicing from 01.01.2025. At the same time, your accounting software must be able to read and process the e-invoice and forward it digitally to your tax consultant's office.
Next, you need an email address. I strongly advise you to create central email addresses for your invoices, each with their own inboxes and outboxes in your email client, so that you don't run into any problems with GDPR. Mail addresses such as invoice@companyname, accounting@companyname, incominginvoice@companyname or outgoinginvoice@companyname could be possible ideas that you should implement.
Also note the 10-year retention obligation and retention period - also for e-invoices.
What are the challenges of switching to e-billing?
Sebastian Bourne: Companies that still maintain and distribute quotations, measurements, acceptance reports or invoices on paper will need software by 01.01.2025 with which they can create these documents.
The selection of software and the requirement for possible interfaces with accounting and tax consultants can be time-consuming and cost-intensive.
However, a first step has already been taken with the technical requirements, and I can briefly enquire about the accounting software at the tax consultancy firm and thus ask the craftsman software provider about this interface so that the invoices can be transmitted digitally and fully automatically.
In addition to emails, you also need backups of various digital devices and all software. At least three data backups are required in addition to the live system, two of which must be in-house and one off-site or even in the cloud.
In addition to your tradesman software, your accounting software and the software of your tax consultancy firm must also be able to accept, display and process e-invoices.
Which advantages does the e-invoice offer?
Sebastian Bourne: Let's now talk about the possibilities, opportunities, and options of digital invoices in the form of electronic invoicing.
There are many advantages that speak in favor of electronic invoicing:
- transparency
- less control required
- general time saving
- automated invoice verification
- simplified invoicing
- faster payment or faster receipt of money
- liquidity through better financial planning
- accelerated incoming and outgoing payments
- improvement of work processes
- cost reduction due to less material and time expenditure
What are the challenges?
Don't panic! In your everyday business as a landscaper, you have already implemented completely different projects with calm, common sense, communication and diligence. So use exactly these virtues and approach the topic of electronic invoicing in your company in the same way. As an entrepreneur, you lead the way and create ACCEPTANCE. The "challenge" is therefore to educate, sensitize, qualify, and thus sustainably develop your team.
Working with digital devices, such as PCs or laptops, smartphones, tablets, or even operational machines, will become increasingly important in the future. It will take time to find the right balance here. Once you have overcome these technical hurdles in your company, electronic invoicing is not far away.
How can entrepreneurs prepare for e-invoicing?
There are a sufficient number of people involved in the business processes of your company who are already familiar with the topic of electronic invoicing. This includes, for example, the provider and support of your tradesman and accounting software or your tax consultancy firm, as they must also fully process the finished receipts from 01.01.2025.
If you are unsure, write emails or make appointments for clarification. Also pay attention to information offers from your service providers and take part in them. Make notes that you can then process digitally internally.
Your stationery is now obsolete due to digital invoicing and sending by email, but even the display on the monitor is not sufficient for an actual digital invoice. To do this, you must fully enter and save your company master data in your tradesman software.
You must also have fully entered or read in and securely saved customer master data and item master data.
The minimum requirements for invoices include:
- company master data, invoice recipient:in, item master data
- invoice date, performance/execution period, consecutive invoice number
- terms of payment, rebates, discounts, delivery costs, cash discount and the currency "Euro"
- information on tax exemption or reverse charge procedure
- security retentions, ancillary construction costs and construction insurance
To conclude this interview, do you have any tips and tricks for successfully switching to electronic invoicing?
Sebastian Bourne:
- Keep calm, sit down, talk, make a plan - implement!
- Get started with your operational data maintenance as soon as possible!
- Write to tradesman software support and ask when they will start so that you still have time to make a change if necessary!
- Contact your tax consultancy firm to find out what the status is internally.
- Look for accounting software that displays and supports electronic invoices as incoming invoices!
- Sensitize, qualify, and train your team!
