ZUGFeRD — the e-Invoicing system in Germany
Welcome to our guide on ZUGFeRD, a revolutionary e-invoicing format developed by the Electronic Invoice Forum Germany (FeRD) and backed by the Federal Ministry for Economic Affairs and Energy. Aimed at cross-border commerce professionals and tax advisors, this guide demystifies ZUGFeRD, aligning with Directive 2014/55/EU for seamless electronic invoicing in B2B, B2G, and B2C transactions.
ZUGFeRD combines the clarity of PDFs with the efficiency of XML data to provide a hybrid solution that improves operational procedures while still meeting EU digital requirements. We intend to provide you with critical insights into ZUGFeRD, enabling you to optimise invoicing operations, assure compliance, and provide expert advice in this digital era.
Germany is preparing to significantly shift to electronic invoicing, with a progressive implementation approach centred on the ZUGFeRD standard.
Voluntary Adoption Starting 2025: Beginning in 2025, businesses in Germany can voluntarily adopt e-invoicing using the ZUGFeRD format. This initial phase allows companies to adapt quickly, get accustomed to the new system, and address any operational issues.
Mandatory E-Invoicing from 2026: The shift towards mandatory e-invoicing is scheduled for 2026. At this point, all relevant businesses will be obliged to utilise e-invoicing for their transactions, marking a significant development in Germany’s progression towards digitalising business processes.
The Hybrid Format
ZUGFeRD, a unique hybrid e-invoicing format, seamlessly integrates a familiar PDF invoice with an embedded XML file. This combination delivers human-readable and machine-interpretable invoice data, catering to diverse business scenarios across B2B, B2G, and B2C transactions. The versatile ZUGFeRD excels in automation, streamlining processes for businesses and government agencies while enhancing customer experiences with clear and understandable invoices. Its adaptability makes it ideal for cross-border commerce and tax consultancy professionals.
ZUGFeRD’s Compliance with EU Standards
The design and implementation of ZUGFeRD precisely follow to EU standards, making it a compliant option for enterprises wishing to meet regional needs. The format has been recognised as a structured electronic invoice, which is consistent with the EU’s objective of modernising invoicing processes across member countries.
This conformity is required by the European Union’s ViDA (VAT in the Digital Age) initiative, which aims to redefine invoices as structured electronic data. The ZUGFeRD format, particularly version 2.0.1 and later, has been recognised for meeting these characteristics, guaranteeing that enterprises that use it are well-positioned to comply with impending EU directives and laws.
ZUGFeRD vs XRechnung
|Hybrid (PDF/A-3 and XML)
|Purely digital XML
|Primary Use Case
|B2B and B2G transactions
|B2G transactions (public sector in Germany)
|Restricted to CII syntax
|Supports UB and CII syntax
|Less flexible due to PDF component
|More flexible due to pure XML format
|Compatible with existing ERP and accounting systems; no dedicated software required
|Requires dedicated invoice processing software
|Versatility, cross-industry compatibility, media-free data processing
|Streamlined invoice processing, error reduction, greater syntax flexibility
|Not mandatory for all transactions
|Mandatory for B2G invoicing to German authorities
Benefits of ZUGFeRD
Automated Invoice Management
ZUGFeRD streamlines invoice processing, reducing manual effort and enhancing accuracy, leading to significant cost savings.
Reduced Processing Time and Costs
ZUGFeRD expedites invoice processing, leading to faster payments and cost savings of around EUR 10 per invoice, equating to a 60% reduction.
Eliminating Physical Costs
ZUGFeRD removes the need for postage and paper, further reducing operating expenses.
Hybrid Format for Versatility
ZUGFeRD combines PDF and XML, catering to both traditional and digital environments, making it suitable for various business partners and transaction types.
Step-by-step guide for companies migrating to ZUGFeRD e-invoicing
Step 1: Evaluate Current Processes
- Assess your current invoice generation, processing, and transmission methods.
- Identify areas where ZUGFeRD can streamline and automate processes.
- Evaluate the impact of ZUGFeRD on your existing ERP, accounting, and other business systems.
Step 2: Choose the Right ZUGFeRD Software
- Select software that can convert existing invoices into ZUGFeRD format or generate new ones directly in this format.
- Consider software compatibility with your existing systems, such as ERP, EDI, and other business applications.
- Evaluate user-friendliness, ease of integration, and support options for the chosen software.
Step 3: Integrate ZUGFeRD with Existing Systems
- Utilize standard software integrations or custom development if necessary.
- Connect ZUGFeRD software to your ERP, accounting, and other relevant systems.
- Ensure seamless data exchange and error-free synchronisation between ZUGFeRD and your existing processes.
Step 4: Train Employees
- Conduct comprehensive training sessions to familiarise employees with ZUGFeRD e-invoicing.
- Explain the hybrid nature of ZUGFeRD invoices, including the PDF and XML components.
- Train employees on the chosen ZUGFeRD software, including invoice generation, processing, and any specific functionalities.
Step 5: Implement ZUGFeRD Gradually
- Start with a pilot phase to test ZUGFeRD in a controlled environment.
- Gradually expand ZUGFeRD adoption across all business units and departments.
- Monitor the implementation process and address any challenges or issues promptly.
Step 6: Monitor and Evaluate
- Continuously monitor the performance of ZUGFeRD in your business.
- Track key metrics such as invoice processing time, error rates, and user satisfaction.
- Evaluate the financial and operational benefits of ZUGFeRD and make adjustments as needed.