E-Invoicing
E-invoicing is the exchange of invoices in a structured, machine-readable electronic format between the systems of supplier and customer – as opposed to paper invoices or PDF files sent by email.
Billing
Explanation
A structured e-invoice contains the invoice data in a defined format that the recipient's system can process automatically. Common standards include the European standard EN 16931 and formats such as XRechnung, ZUGFeRD, UBL, or Peppol.
Requirements differ by country:
• United States: there is currently no federal B2B e-invoicing mandate; adoption is driven by industry initiatives and business demand.
• Germany: since January 1, 2025, companies must be able to receive structured e-invoices for domestic B2B transactions. From January 1, 2027, companies with prior-year turnover above EUR 800,000 must issue them; from January 1, 2028, the requirement applies to all.
• European Union: the VAT in the Digital Age (ViDA) package, adopted in March 2025, introduces mandatory e-invoicing and digital reporting for intra-EU cross-border B2B transactions from July 1, 2030.
Why It Matters
US companies with European entities or customers need billing processes that can produce compliant e-invoices. E-invoicing affects billing documents, master data, output management, and integration with tax and reporting systems – including in SAP SD, SAP BRIM, and FI-CA.
Related Terms
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