E-invoicing with SAP

• The XRechnung is a national version of the EU standard EN 16931 (Core Invoice Usage Specification) for electronic invoices in Germany.

• It is a structured XML format that is specifically designed for invoices to public contracting authorities (federal, state, and local governments).

• XRechnung defines mandatory fields (e.g., routing ID, the BT field model of the standard) and validations so that authorities can automatically check and process the invoice.

E-invoice (general)

• ZUGFeRD is a standard widely used in Germany that combines XML data with a human-readable PDF (PDF + embedded XML).

• From version 2.1 (or in newer versions), ZUGFeRD includes an “XRechnung” profile, meaning that a ZUGFeRD file can also meet the requirements of XRechnung (if no PDF representation or as an optional component).

• This means that an invoice can be both human-readable (PDF) and machine-readable (XML) while also meeting the formal requirements of XRechnung (if implemented correctly).

Typical building blocks & Procedure in the SAP environment:

• Introduction of an e-invoicing module that supports XML schemas, validation rules and mapping.
• Use of SAP technologies such as SAP DRC (Document Compliance) and, if necessary, SAP Integration Suite for transforming and transmitting invoice data.
• Use of add-ons or third-party solutions for mapping, validation and sending/receiving.
• Integration into the existing invoice workflow (invoicing, approval, archiving).
• Automatic checking for compliance with XRechnung Schematron rules or other checking rules.
• Connection to transmission networks (e.g., PEPPOL, public administration platforms).

Invoice recipient:

The new e-invoicing requirement will apply from January 1, 2025 (receipt/readiness).

The invoice recipient does not have to agree to an invoice being issued as an e-invoice. Consent is only required for electronic invoices that either do not comply with the new e-invoicing requirements or if there is no e-invoicing requirement (e.g., for certain tax-exempt transactions or small-amount invoices).

An e-invoice, or electronic invoice, is a digital document used to bill for goods and services. It is created, transmitted and processed electronically, automating the entire invoicing process. E-invoices contain all the relevant information of a traditional invoice, such as invoice number, date, amount and payment terms, but in a structured format that allows for machine processing.

The advantages of e-invoices include:

1. Efficiency: Automated processes reduce the time required for invoicing and processing.

2. Cost savings: Less paper consumption and lower shipping costs.

3. Error reduction: Automated data transfer minimizes manual input errors.

4. Faster payments: E-invoices can be processed and paid more quickly.

5. Environmental friendliness: Reducing paper consumption contributes to sustainability.

E-invoices are now legally recognized in many countries and are exchanged in various formats, such as XML or PDF.

Since November 27, 2020, at the latest, German lawmakers have required invoices to public contractors at the federal level to be sent in the XRechnung e-invoice format. The regulation was subsequently extended to the state level. With the Growth Opportunities Act BGBl. I 2024 No. 108, the legislature decided to introduce e-invoicing in Germany in the B2B environment.

Key points regarding e-invoicing in Germany:

• Regulations and framework conditions:
• Directive 2014/55/EU of the European Parliament forms the basis for the introduction of e-invoicing.
• The German E-Invoicing Act and the E-Invoicing Regulation (ERechV) supplement these requirements.

• Technical standards:
• ZUGFeRD (Central User Guide of the German Electronic Invoicing Forum) and XRechnung are the two standards recognized in Germany.
• XRechnung has been mandatory for the public sector since November 2020 because it meets the requirements of the EU directive.

• Channels:

• PEPPOL (Pan-European Public Procurement Online) is a network for promoting electronic business transactions, particularly in public procurement in Europe. E-invoicing is a central element of this system.
• Email

E-invoicing is no longer a national issue. The EU directive also applies in other EU countries, although it is implemented using different XML formats, such as the Italian FatturaPA. There are also a wide variety of other standards around the world that must be observed when invoicing in the respective country. This makes it increasingly difficult for internationally active companies in particular to meet compliance requirements. Not only do e-invoice formats vary internationally but so do the mandatory information on invoices and the requirements for data delivery. In some cases, the use of portals or the involvement of tax authorities is legally required. In addition, a distinction is made between public billers and recipients and private companies. Even within a single country, this results in different constellations that must be taken into account and mapped in the company's own ERP system.

The use of e-invoices has increased worldwide because they offer efficiency, cost savings and faster payment processing. Here are some important aspects of e-invoicing in an international context:

• Legal requirements: Each country has its own legal requirements and regulations for e-invoices. Some countries, such as Italy and Spain, have already introduced comprehensive regulations, while others are still in the implementation phase.
• Formats: There are various standards for e-invoices, which vary depending on the region and industry. Common formats include UBL (Universal Business Language), EDIFACT, and XML. In Germany, the ZUGFeRD format is frequently used.
• Technological infrastructure: The exchange of e-invoices requires a suitable technological infrastructure. Many countries have platforms and networks that support the secure and efficient exchange of e-invoices.

Overall, the international use of e-invoices contributes to improving efficiency in business processes and promotes digitization in global trade. Companies that operate internationally should inform themselves about the specific requirements and standards in the respective countries to ensure the smooth exchange of e-invoices.