First interim conclusion after six weeks

Companies and service providers report that initial forecasts for the volume of e-invoices exchanged have been significantly exceeded. However, there are also problems with the correct validation and practical use of the formats. What follows is a classification of the most important findings, as well as recommendations for action based on current developments and the exchange of users in practice.

E-Invoice Exchange Volume Higher Than Expected

Even before the mandatory e-invoicing requirement took effect, industry chambers, associations, solution providers, and e-invoicing experts emphasized the growing importance of digital invoicing processes.

As a solution provider closely connected to the market, we have observed that the volume of exchanged e-invoices is much higher than anticipated. Several factors contribute to this trend:

• High acceptance due to legal framework: Many ERP providers and businesses were prepared for the transition due to existing obligations in the public sector, particularly in procurement procedures. However, some companies were unaware of the new regulations, leading to confusion.
• Increase driven by digitalization: The general digital transformation, along with investments in ERP systems and invoice receipt portals, has significantly boosted e-invoice volumes.

Despite these positive developments, challenges remain, as many companies have only partially completed their technical transition.

 

50% of All E-Invoices Are Non-Compliant

E-invoice compliance and the associated business rules are fundamental aspects of e-invoicing standards, yet many businesses are unaware of this.

A key insight from compliance checks is that a significant number of e-invoices contain formal or content-related validation errors. Market observations and statements from solution providers indicated as early as 2024 that up to 50% of all transmitted e-invoices fail validation under the EN 16931 standard.

 

Why are there so many deviations from standards?

1. Lack of or outdated validation tools: Some businesses use e-invoicing tools but lack current validation mechanisms.
2. Incomplete data: Simple errors, such as missing standard elements, buyer information, or invoice amount discrepancies, lead to rejections.
3. Formal errors: Using incorrect profiles, outdated versions, or uncoordinated extended variants of XRechnung, ZUGFeRD, or Factur-X often results in non-processable data for recipients.

Discussions on these issues were already prominent in 2024. However, practical implementation shows that many businesses do not adhere strictly to the standards and conduct little to no validation. As a result, errors must be manually reviewed and commented on, preventing full automation.

Compliance Validation Not a Standard Feature Among Solution Providers

Another issue stems from solution providers and ERP system manufacturers.

• Interface problems: Many e-invoicing platforms or in-house systems meet the minimum requirements for sending e-invoices but neglect systematic validation processes.
• Lack of automatic updates: Some providers delay releasing new interface versions (e.g., XRechnung 3.0), leaving customers uninformed about necessary updates.

The XRechnung standard requires e-invoices to be validated for compliance with specifications. While the results serve as recommendations rather than binding requirements, many businesses fail to integrate this validation step systematically.

 

Identifying Attachments and Embedded Documents in E-Invoices

Another challenge in automated invoice processing is handling attachments and embedded documents, which are managed differently across e-invoicing standards:

• Missing recognition: Some systems do not recognize embedded documents (e.g., delivery notes, performance records) because they only extract structured invoice data.
• Changed documentation practices: Previously, all data (e.g., service descriptions) was included in a single PDF document. With e-invoicing, such information must often be stored separately or within structured fields.
• No unified classification: Even if attachments are detected, many systems lack the ability to associate them with corresponding invoice items or booking records.

Standardization Initiatives have issued recommendations on handling embedded documents in ZUGFeRD/Factur-X or X-Rechnung, but many businesses have yet to implement these guidelines effectively.

 

Ongoing Uncertainty About Hybrid Formats: PDF or XML?

The issue of hybrid formats continues to cause confusion. Companies are uncertain whether they should send purely structured XML invoices (XRechnung, UBL) or PDFs (potentially with embedded XML data, as in ZUGFeRD/Factur-X) to their business partners.

• Clear statement from the Ministry of Finance: The ministry has repeatedly emphasized that structured e-invoices (XRechnung, ZUGFeRD/Factur-X) comply with legal requirements, while simple PDFs will no longer be permissible after specified transition periods.
• Transitional arrangements: Despite this, transition periods apply for B2B transactions. Many companies use multiple formats (PDFs and e-invoices or various e-invoice formats), leading to confusion, errors, and additional processing efforts.
• Recommendation: To ensure compliance, businesses should already transition to fully structured formats and validate invoices before sending them to ensure recipient compatibility, e.g. with BLU DELTA.

E-Invoicing as a Catalyst for Automation

For many companies, e-invoicing also paves the way for automating related processes. The first weeks of implementation have shown an increased demand for automation solutions, such as document classification, direct integration with purchase orders, and linking invoices with accompanying documents. E-invoicing serves as a catalyst for automating previously manual or semi-automated processes.

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What Can Businesses Do to Automate Their E-Invoicing Management?

Given current challenges, companies should take the following measures to ensure compliance and optimize automation:

1. System-Check and Updates
   • Ensure that ERP and e-invoicing systems are up to date (e.g., latest XRechnung and ZUGFeRD/Factur-X profiles).
   • Schedule regular updates and patches to ensure validation rules remain current to achieve the highest level of automation.
2. Integrated validation
   • Use tools for automatic e-invoice validation on both sender and receiver sides.
   • Check whether your service provider or platform provider offers complete, updated validation and, if necessary, further tax-relevant audits.
3. User training
   • Educate employees on new formats, required fields, and attachment handling: What is an XRechnung, what are the mandatory fields, how are attachments recognized and assigned?
   • Ensure clear internal processes so that the specialist departments (e.g. accounting, purchasing) know which data must be submitted and in which form.
4. Close collaboration with partners
   • Talk to your customers and suppliers about the type of exchange and clarify how use cases, industry-specific features or attachments should be provided or received.
   • Work together to create clear processes to process incoming and outgoing invoices as automatically as possible.
5. Monitoring and Reporting
   • Set up a controlling system for the invoice processes to keep an overview of valid and invalid invoices.
   • Use dashboards and reports to identify errors or bottlenecks in processing at an early stage and take corrective action.
6. External support
   • Check whether it might make sense to work with an e-invoicing service provider that handles validation processes and data exchange in a standardized manner.
   • Tax consultants and IT service providers can be important contacts for setting up processes that comply with the law and the process.

Conclusion

After the first weeks of the e-invoicing obligation in Germany (2025), it is clear:

• Digital invoicing processes are progressing rapidl.
• Significant challenges remain regarding compliance, integration, and adherence to standard formats.
• The volume of e-invoices exchanged already exceeds previous forecasts.
• However, studies and market experience indicate that nearly half of all documents contain errors.

To address these issues, businesses and solution providers must collaborate more closely on validation processes and adhere to current standard versions. Hybrid formats should be clarified and correctly mapped in ERP systems to recognize essential attachments. By implementing a clear strategy, regular updates, and best practices for structured formats, companies can achieve automated and legally compliant e-invoicing management.

 

 

• Questions and answers about the introduction of the mandatory (compulsory) e-invoice on January 1, 2025
  https://www.bundesfinanzministerium.de/Content/DE/FAQ/e-rechnung.html, February 5, 2025, February 7, 2025
• Coordination Office for IT Standards (KoSIT) - XRechnung and Standardization
  https://xeinkauf.de/faq/xrechnung/

• Forum for Electronic Invoicing Germany
  https://www.ferd-net.de/

• Photo by Scott Graham on Unsplash

Note: This article summarizes the developments as of mid-February 2025. The figures and experiences mentioned are based on direct contacts with various market participants. Current changes or further requirements are published in the publications of the BMF and the Coordination Office for IT Standards.