B2B Electronic Invoicing in Germany: What Online Stores Must Do in 2025

Right now, somewhere in Germany, a business just lost a major B2B contract because it couldn’t handle electronic invoices properly. Meanwhile, their competitor, who invested in the right e-invoicing setup, just secured three new clients specifically because of their streamlined invoicing process.

This is the new reality of B2B commerce in Germany. The e-invoicing mandate is here. And it’s already separating the prepared from the unprepared.

At 2HatsLogic, we’ve been in the trenches with businesses making this transition. We’ve seen the wins, the failures, and everything in between. The pattern is clear: success comes down to moving fast and moving smart.

What Is B2B Electronic Invoicing?

Let’s start with the basics. B2B electronic invoicing means sending invoices between businesses in a structured digital format instead of paper or regular PDFs.

Think of it like this: instead of sending a pretty PDF that looks like a traditional invoice, you’re sending invoice data in a format that computers can automatically read and process.

An electronic invoice is an invoice that has been issued, transmitted, and received in a structured data format that allows for its automatic and electronic processing.

The keyword here is “structured.” This isn’t just about going paperless, it’s about sending invoice information in a way that the recipient’s accounting software can automatically import and process without human intervention.

Why Is Germany Making E-Invoicing Mandatory?

Germany introduced this mandate as part of their Growth Opportunities Act. The government wants to:

• Combat tax fraud more effectively
• Increase transparency in business transactions
• Modernize the country’s invoicing processes
• Reduce administrative burden in the long run

This measure is part of the Growth Opportunities Act, which aims to improve the efficiency and transparency of invoice processing and reduce tax fraud.

The Timeline: What Happens When

Here’s where things get interesting. Germany isn’t flipping a switch overnight, they’re rolling this out in phases:

January 1, 2025 (That’s Right Now!):

• All companies must be able to receive electronic invoices starting from January 2025.
• You can still send paper invoices or PDFs if your customer agrees
• But you MUST be able to receive e-invoices from your suppliers

January 1, 2027:

• Businesses with an annual turnover above € 800,000 in the previous calendar year must issue e-invoices
• Smaller businesses can still use paper invoices until 2028

January 1, 2028:

• This requirement also applies to businesses with an annual turnover below €800,000.
• Everyone must send e-invoices

XRechnung vs ZUGFeRD: Understanding the Formats

Now here’s where many business owners get confused. There are two main e-invoicing formats you’ll hear about: XRechnung and ZUGFeRD.

Let’s break this down in simple terms:

XRechnung

The XRechnung is based on an XML data format. Instead of a readable document, the XRechnung consists of a data set in the form of lines of code.

Think of XRechnung like a spreadsheet that only computers can read. It contains all your invoice information, but it’s not something a human would want to look at directly.

Best for:

• Companies that work mainly with government clients
• Businesses with fully automated accounting systems
• Tech-savvy organizations

ZUGFeRD

A ZUGFeRD invoice is a hybrid invoice format that combines two elements in one document. Like the XRechnung, it contains an XML data set, but it also contains a PDF/A-3 document that looks like a conventional invoice.

You get a normal-looking PDF invoice that humans can read, plus the structured data that computers need, all in one file.

Best for:

• Most online stores and e-commerce businesses
• Companies that want flexibility
• Businesses serving both other companies and government clients

What Online Stores Need to Do Right Now

As an online store owner, here’s your action plan:

Step 1: Set Up E-Invoice Reception

From 1 January 2025, all businesses should ensure they can receive electronic invoices

The good news? To receive an e-invoice, it is sufficient to provide an email address, unless another electronic transmission method has been agreed upon between the companies involved in the transaction.

This means you can start by simply having an email address ready to receive e-invoices. However, you’ll want to think about how you’ll process these invoices in your accounting system.

Step 2: Evaluate Your Current Systems

Look at your current e-commerce platform and accounting software:

• Can they generate XRechnung or ZUGFeRD formats?
• Do they have plugins or extensions for German e-invoicing?
• Will you need to upgrade or switch systems?

Popular e-commerce platforms like Shopware, Shopify, WooCommerce, and Magento are adding e-invoicing capabilities, but you’ll need to check what’s available for your specific setup.

Step 3: Plan for 2027 (If You’re a Larger Business)

If your annual turnover exceeds €800,000, you’ll need to start issuing e-invoices by January 2027. Start planning now:

• Choose between XRechnung and ZUGFeRD (we recommend ZUGFeRD for most online stores)
• Test your systems with willing customers
• Train your team on the new processes

Common Challenges and Solutions in E-Invoicing 

Before you start worrying about potential roadblocks, here are the most common e-invoicing challenges we encounter, and exactly how to solve them.

Challenge 1: “My Customers Don’t Want E-Invoices”

Solution: Remember, from 2025 onwards, an invoice receiver cannot refuse to accept e-invoices from its issuers. Your customers legally can’t reject e-invoices once the mandate is in effect.

Challenge 2: “My Accounting Software Doesn’t Support This”

Solution: Many accounting software providers are rapidly adding e-invoicing features. Check with your current provider first, or consider solutions that can integrate with your existing setup.

Challenge 3: “This Sounds Expensive”

Solution: While there might be initial setup costs, e-invoicing typically saves money in the long run through reduced paper costs, faster processing, and fewer errors.

The Benefits You’ll See

Once you’re set up with e-invoicing, you’ll likely notice:

Faster Payments: ZUGFeRD expedites invoice processing, leading to faster payments and cost savings of around EUR 10 per invoice, equating to a 60% reduction.

Fewer Disputes: Structured data means fewer misunderstandings about invoice details.

Reduced Administrative Work: No more printing, stuffing envelopes, or dealing with lost invoices.

Better Cash Flow: Automated processing means customers can pay you faster.

Penalties for Non-Compliance

Here’s what you need to know about the consequences of not following the rules:

Failing to adhere to the e-invoicing mandate in Germany could lead to serious financial and legal penalties. Non-compliance may result in rejected invoices, delayed payments, and disruptions in business relationships.

The German tax authorities haven’t published specific penalty amounts yet, but it’s clear that non-compliance isn’t worth the risk.

Exceptions to Keep in Mind

Not every invoice needs to follow the new rules. Invoices whose total amount does not exceed € 250.00 (invoices for small amounts) can always be issued and transmitted as “other invoices”.

This means your small transactions can still use regular PDFs or paper invoices.

Also, if you only sell to consumers (B2C), these rules don’t apply to those transactions, only B2B sales are affected.

Getting Help with Implementation

Implementing e-invoicing doesn’t have to be a solo journey. Here are your options:

Software Solutions: Many vendors offer e-invoicing solutions that integrate with popular e-commerce platforms.

Consultants: Tax advisors and digital transformation consultants can help you choose the right approach.

Professional Services: Some companies offer end-to-end e-invoicing implementation services.

At 2HatsLogic, we’ve helped numerous online stores navigate digital transformations, including e-invoicing implementations. We understand the unique challenges that e-commerce businesses face and can help you choose and implement the right solution for your specific needs.

Action Steps

Here’s what you should do right now:

1. Check Your Current Setup: Can your accounting system receive structured e-invoices?
   
2. Contact Your Software Providers: Ask about their e-invoicing roadmap and available solutions.
   
3. Start Testing: If possible, ask a willing supplier to send you a test e-invoice.
   
4. Plan Your Timeline: Create a roadmap for when you’ll need to start issuing e-invoices.
   
5. Get Professional Help: If this feels overwhelming, consider getting expert guidance.
   

The Bottom Line

Germany’s B2B e-invoicing mandate is happening whether we like it or not. The smart move is to get ahead of it rather than scrambling at the last minute.

Yes, there’s some work involved in getting set up. But once you’re running with e-invoicing, you’ll probably wonder why you didn’t make the switch sooner.

The key is to start now, even if you’re setting up the ability to receive e-invoices. Take it one step at a time, and remember that thousands of other German businesses are going through this same transition.

Get in touch with us today and let’s get your business ready for the future of invoicing.