If you’re self-employed and working for Germany’s Federal Government, you’ll have heard of e-invoicing already. How come? Because...
As of 27 November 2020, the Federal Government will no longer accept paper or PDF invoices.
Yes, ‘XRechnung’ or ‘ZUGFeRd’ invoicing are now mandatory when freelancers and sole traders bill the Federal Government in amounts over €1,000. But hold on… what do these terms even mean?
And, more importantly, what do they mean for you?
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Electronic invoices are invoices that are issued, transmitted and received in a structured, machine-readable format (using XML file format). This allows for invoice information to be exchanged digitally between companies. The advantage? Huge savings on admin time, and no mistakes. E-invoices can be processed automatically and paid faster.
An ordinary invoice that you send by e-mail as a PDF is not an e-invoice.
This is today’s [insert-earnings-figures-here]-euro question. And the answer?
If you have Federal Government clients, then e-invoicing will be mandatory for you as of 27 November 2020.
Other public bodies – such as regional and municipal administrations, energy companies, schools and hospitals – will soon follow, most likely in 2021. But so far no official deadlines have been announced.
Right now, mandatory e-invoicing is being pushed in the B2G (Business to Government) sector. Nevertheless, more corporations and larger companies are making e-invoicing the standard way of collecting earnings. So if you work for these companies – or want to work for them – you may as well familiarise yourself with e-invoicing now. It’s super easy, and we’re here to break it down for you.
Mandatory e-invoicing in the public sector comes off the back of Germany’s adoption of the European Directive 2014/55/EU (or ‘E-Invoicing Directive’), dating from 16 April 2014. Other EU countries have already made this a legal requirement, Germany is just catching up!
Get with the Rechnungsprogramm, Germany.
The EU expects electronic invoicing to cut costs. Germany alone expects to save 6.5 billion euros per year.
If you only send a few bills, there’s a manual but time-consuming solution. You can use the Government portal to convert a standard invoice into an e-invoice online. To do this, visit the ‘Zentrale Rechnungseingangsplattform des Bundes’ (ZRE – yes, that’s some Grade-A German bureaucracy humour for you). In English, that’s the ‘Federal Invoice Receipt Platform’.
But if, like us, you hate government portals and find the word ‘Rechnungseingangsplattform’ mildly terrifying – ‘What is it, a platform for gangs?!*’ – there’s an easier way.
E-invoicing software works just like a normal invoicing tool, except it creates your invoices in machine-readable format.
*Just kidding, obviously we know what this means. We already translated it above!
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Tip: Choose Holvi Grower for unlimited e-invoicing With Holvi Grower, you can create unlimited invoices and e-invoices right in your business account, and send them with a few taps. No extra software, and no messy government portals. All you need to run your B2B, B2C and B2G business, in one place. |
Look, we feel you. Studying all of Germany’s available e-invoicing formats is mentally taxing, not to mention confusing. Luckily, you don't have to. Here’s all you need to know:
Holvi supports both formats. So however your recipient chooses to receive your e-invoice, Holvi delivers.
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Tip: Take a break from freelancing For a fun foray into fantasy, type ‘zugferd’ into Google Translate and imagine your invoices being delivered by horse-drawn carriage! |
Glad you asked. Exactly the same way you’d create an ordinary invoice with Holvi.
Complex systems are at work behind the scenes – but fortunately, you don’t need to worry about those. As far as you’re concerned, it’s magic. Quick, effortless, payment-collecting magic.
A long time, truly.
The same storage requirements apply as for standard invoices, only reversed. So…
This means that a paper printout of the electronic invoice is not valid.
You might be thinking, ‘This all sounds fine, but how much will it cost me?’ Good news! With Holvi's Grower plan, you can create unlimited electronic invoices – at no extra cost.
On top of the e-invoicing feature, you also benefit from a business account built-in invoicing and expense management tools.
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Tip: A useful German resource For more information (in German), visit the German Federal Government's e-invoicing page. |
For those who find this kind of thing fascinating and want to learn more technical terms, here’s our e-invoicing glossary.
The invoice recipient’s address. The Federal Government and Länder (Austrian states) have agreed on this standardised format. As a freelancer billing the Government, you’ll be informed of the Leitweg-ID in advance.
OZG-RE stands for ‘Online Access Act (compliant) Incoming Invoice (platform)’ in English.
You need this platform to send e-invoices manually to authorities of the indirect federal administration and cooperating federal states.
This is something like the transmission network for e-invoices. If you use an invoicing tool like Holvi's, your e-invoices will be sent in the background over this network.
The Federal Government’s Central Invoice Receipt Platform. Here you can submit e-invoices manually to institutions of the direct federal administration (e.g. ministries and higher federal authorities).
Central User Guide of the Forum elektronische Rechnung Deutschland.
No, this doesn’t mean ‘XRechnung My Life’. XML stands for ‘Extensible Markup Language’. It’s a file format used to exchange data between applications.
An e-invoice standard with structured XML data. XRechnung was developed on the basis of the European Standard EN 16931.