Mandatory e-invoicing is on the horizon – but the Growth Opportunities Act is by no means the only legal change that will affect the SME process industry in the future. In this blog post, we’ll keep you informed about the latest developments regarding e-invoicing and show you why you can rely on SAP business applications, no matter what the legislator comes up with.
“Risk Factor” Legislator
You have a functioning ERP system. You have well-established business processes. And then a new law emerges that, if it doesn’t turn the status quo on its head, it at least thoroughly disrupts it. In the past, when manual paper processes dominated the working world, legal changes, such as creating a new invoice template, were relatively easy to implement.
In the age of process automation and data integration, however, new regulations almost inevitably have an impact on the IT systems that drive your processes and keep them running. This is where it gets exciting: can the ERP system be adapted so that your company can implement the new rules on time? Or will every minor or major change require an expensive update or a costly change of software? After all, companies tend to underestimate how much these things would cost.
The most prominent example of a change brought about by a new law is the mandatory electronic invoice for domestic B2B sales. Following the EU Commission's guidelines to ensure German companies don’t use different systems, the German government’s aim is to facilitate digitalization that simplifies procedures such as invoice processing. Unfortunately, however, the transition does have its pitfalls.
Introducing Electronic Invoicing in Germany: A Closer Look at the Details
On November 17, 2023, the German Bundestag passed the Growth Opportunities Act. For your company, this means that electronic invoicing (e-invoicing) will likely become mandatory. The obligation to issue an electronic invoice applies only to the B2B sector, i.e., business transactions between two companies. What’s more, this shall only apply if the supplying company and the recipient of the service have their registered offices in Germany.
What is the current definition of an e-invoice?
The law defines an e-invoice as an invoice that is issued, transmitted, and received in a structured electronic format of a European standard for electronic invoicing and allows electronic processing. Well-known formats that meet these requirements include XRechnung and ZUGFeRD. The situation is different with a PDF invoice that is sent via email, however, as this will no longer be considered an electronic invoice from 2025.
What do SMEs need to be prepared for?
As you can see, significant changes are coming for B2B companies, and not everyone will be prepared for them. The effort required for the transition will be substantial, especially for smaller companies, depending on the current state of invoice processing in their ERP systems. Not every company has the technical capabilities to send or receive an e-invoice in accordance with the Growth Opportunities Act. As such, implementation will tie up financial, organizational, and human resources.
A vital aspect here concerns the technical framework, which should be published at least one year before the mandatory introduction. This is the only way IT service providers and companies can prepare in good time. To ensure a smooth transition, a suggested 12-month testing phase has been proposed, during which companies can voluntarily exchange e-invoices across various platforms. It goes without saying that a reliable internet infrastructure is indispensable for the process.
What you need to know about e-invoices:
- A gradual implementation of the mandatory measures is planned, which should give companies time to take all the necessary precautions. The success of e-invoicing depends on the technical infrastructure working and SMEs not being overburdened.
- Even if the obligation to issue invoices electronically does not actually come into force until later, the new definitions of terms will apply from January 1, 2025.
- The Federal Council has advocated postponing the introduction of mandatory electronic invoicing by two years. This way, the receipt of electronic invoices would not become mandatory until January 1, 2027.
Implement future legal changes such as e-invoicing with SAP solutions: free of charge, fast, and legally compliant
Alongside e-invoicing, B2B companies are also likely to be confronted with new legal requirements in other areas such as data protection, sustainability, and IT security in the future. That’s why you should now be asking yourself how you want to implement these from a technical perspective.
Users of SAP software such as the ERP system SAP Business One or the CRM solution SAP Sales & Service Cloud have it easy: they have essentially acquired a legal certainty guarantee with the business application.
- SAP integrates every legal change into the existing programs and makes it available to you in good time.
- This service costs you neither effort nor money. One release – and you are ready for e-invoicing and the like with SAP.
Your applications are always up to date, no matter what the future holds.
Additional benefits: Organized documents in the electronic archive
Legal compliance is not the only benefit offered by e-invoicing with SAP solutions. The foundation of e-invoicing is the archiving concept. This means that when you introduce e-invoicing, you get an electronic archive as a bonus.
Are you tired of searching for information in filing cabinets, analog and digital folders, and email programs? If so, you'll love the electronic archive! It allows you to bid farewell to tedious searching and say hello to organizing data and documents in a clean, structured manner.
Mobile working requires all important information to be available online. With an electronic archive, you can achieve exactly this in an audit-proof and GDPR-compliant manner.
Meeting the Requirements of E-Invoicing with PART and SAP
Are you interested in digital tools that help you implement your planned specifications? PART and its IT partners have the solution! SAP has already set the course on the system side and is already prepared for e-invoicing. We would be happy to advise you on switching to market-leading SAP software.
