Since 2023, electronic invoicing (e-invoicing) has been mandatory for companies in the public sector in Germany. However, the e-invoicing obligation, which initially applied to public clients and the B2G (business-to-government) sector, is now also being extended to the B2B sector. The Growth Opportunities Act, which will come into force from 2025, will further advance digital invoice processing and requires companies to make a comprehensive switch to digital processes.
What does the Growth Opportunities Act say?
The Growth Opportunities Act is a comprehensive legislative project of the German federal government that aims to promote digitalization in the economy and increase the efficiency of public and private administrative processes. It contains measures to encourage companies and public authorities to make greater use of digital technologies and reduce bureaucratic hurdles.
A central component of the law is the introduction and extension of the e-invoicing obligation, which initially applied to public clients and B2G and has now been extended to the B2B sector. This regulation obliges companies to transmit their invoices in a standardized electronic format (e.g. XRechnung or ZUGFeRD).
The aim of this measure is to simplify invoicing, reduce sources of error and cut administrative costs. In addition, the law ensures that all electronic invoices must be securely archived and stored for a specified period of time. This helps to increase transparency, traceability and compliance in business transactions. The Growth Opportunities Act thus marks an important step towards a modern, digitalized economy and public administration.
Official page on the Growth Opportunities Act
Important deadlines and requirements
- 2025: From January 1, 2025, it will be mandatory for all B2B companies to receive and properly archive e-invoices. Companies must adapt their systems to process electronic invoices in a standardized format and archive them securely for the legally prescribed retention period.
- End of 2026: At the end of December 31, 2026, the transitional regulation that previously allowed B2B companies to use paper invoices or other electronic formats will end. From this date, these companies must only issue and receive e-invoices in the prescribed format.
- End of 2027: An extended transition period for B2B companies with a turnover of less than 800,000 euros in the previous year expires on December 31, 2027. These companies, which were previously able to send invoices in paper or other formats, must also switch to e-invoices by then.
2028: From January 1, 2028, the complete obligation to use e-invoices will apply to all B2B companies. From this date, all invoices must be issued, received and archived exclusively digitally and in a standardized format.
What does this mean for companies?
The introduction of mandatory e-invoicing as part of the Growth Opportunities Act brings far-reaching changes for B2B companies. The switch to digital invoice processing is not only a legal requirement, but also offers numerous advantages. But what exactly do B2B companies need to do to meet the requirements?
Integration of a digital invoice format: B2B companies must issue their invoices in XRechnung or ZUGFeRD format. This means that the invoices must be machine-readable to enable easy processing by recipients. Companies should therefore introduce appropriate software solutions that support these formats.
Automating invoice processing: Manual invoice processing is becoming increasingly inefficient and error-prone. By introducing software solutions for digital invoice processing, companies can increase efficiency and minimize the error rate. Automated workflows help to simplify invoicing and make the entire process faster and smoother.
Document archiving and retention obligations: The requirements for document archiving are also tightened by the e-invoicing obligation. All electronic invoices must be securely archived and stored for a period of ten years. Companies must ensure that their archiving systems meet these requirements.
What comes next?
The e-invoicing obligation and digital invoice processing are just one part of the comprehensive digital transformation that B2B companies in particular will be facing in the coming years. However, the Growth Opportunities Act is not the end of the journey, but rather a milestone on the road to a paperless, digital future.
- Integration of artificial intelligence (AI): Companies are likely to increasingly rely on AI-supported solutions to further improve the efficiency of invoicing. These technologies can not only create and send invoices automatically, but also recognize discrepancies in invoices and make suggestions for correcting errors.
- Further European harmonization: In the coming years, greater harmonization of digital invoice formats can be expected at European level. B2B companies that operate internationally will have to adapt to uniform standards and new requirements.
Conclusion: What will happen with e-billing from 2025?
The introduction of mandatory e-invoicing through the Growth Opportunities Act is a significant step towards digital and efficient administration. B2B companies that have not yet started the changeover must act quickly in order to meet the requirements of the law. However, the digitization of invoice processing not only offers the opportunity to meet legal requirements, but also to optimize processes, save costs and increase efficiency.
At the turn of the year 2024/2025, the B2B sector is facing a number of new challenges, but also opportunities. The implementation of e-invoicing and the automation of invoice processing are key steps on the path to a digital future. Those who prepare well now will not only meet the legal requirements, but will also benefit from the advantages of digitalization.