E-Invoicing Mandate 2027 and 2028: SMBs Should Prepare Now

The e-invoicing mandate is rolling toward the German mid-market in stages, and 2027 will be the decisive year. Since January 1, 2025, every company has already had to be able to receive electronic invoices. The obligation to send structured e-invoices follows in stages - and depending on prior-year revenue, it covers nearly all domestic B2B transactions from 2027, or from 2028 at the latest.

Many SMBs are still putting the topic off because the sending obligation only takes effect in the future. That is risky. The changeover affects not just an invoicing program but accounting, archiving and business processes as a whole. Those who plan now avoid expensive last-minute scrambles shortly before the deadline and turn digitalization into a real efficiency gain.

The phased plan of the e-invoicing mandate at a glance

The legislator has set a clear timetable based on prior-year revenue. You should know these dates:

• Since January 1, 2025: obligation for all companies in the B2B sector to be able to receive e-invoices
• From January 1, 2027: obligation to send for companies with more than 800,000 euros in revenue in 2026
• From January 1, 2028: obligation to send for all remaining domestic companies in the B2B sector

Decisive for the 800,000-euro threshold is the total revenue of calendar year 2026 under Section 19(3) of the German VAT Act (UStG). If your 2026 revenue was below that, you may still issue conventional invoices for transactions after December 31, 2026 until the end of 2027. From 2028 at the latest, the obligation then applies without exception.

Note that the e-invoicing mandate only applies to domestic B2B transactions, that is, to services between companies based in Germany. Invoices to private customers (B2C), small-value invoices up to 250 euros and certain tax-exempt transactions are exempt from the obligation. You should know these boundaries before you change your processes, so that you adapt neither too much nor too little.

XRechnung or ZUGFeRD: these formats are permitted

A genuine e-invoice in the legal sense is not simply a PDF file. It must use a structured, machine-readable format compliant with the European standard EN 16931. Two standards have established themselves in Germany:

• XRechnung: a pure XML format, required above all by public-sector clients
• ZUGFeRD: a hybrid format of PDF and embedded XML that remains human-readable and is well suited for a step-by-step start

Important: a classic PDF invoice will no longer count as an electronic invoice. It is merely a graphical representation that a computer cannot read automatically. Anyone who keeps sending only PDFs will not meet the e-invoicing mandate once the transition periods expire.

For most SMBs, ZUGFeRD is the pragmatic entry point. You get a perfectly readable PDF file in which the structured data travels along invisibly. Recipients without automated processing simply see the familiar invoice, while modern systems can post the XML data directly. This keeps you flexible, no matter how far along your business partners are with automation.

Being able to receive is already mandatory today

Even if you do not yet have to send e-invoices yourself, you are already obliged to receive them. Since January 1, 2025, every company must be able to accept and process incoming e-invoices. In practice, an email inbox that accepts XML or ZUGFeRD files is sufficient at first. What makes more sense, however, is a solution that can read the structured data directly and hand it over to your accounting.

Do not underestimate this point. Business partners can already send you legally compliant e-invoices today, and you are obliged to process them properly. Anyone who merely prints out and files incoming XML invoices risks problems with input VAT deduction and in a tax audit. So clarify early whether your current solution really recognizes, displays and stores incoming e-invoices in an audit-proof manner.

Do not forget GoBD-compliant archiving

A frequently underestimated aspect of the e-invoicing mandate is retention. E-invoices must be archived in their original format - that is, as an XML file or as a complete ZUGFeRD PDF with embedded XML. For tax purposes, the structured data record is authoritative, not the printout.

The GoBD requirements demand that the invoice remain unchanged and retrievable at any time throughout the entire retention period. Simply keeping it in the email inbox is not enough. You need an audit-proof archive that rules out manipulation.

Common misconceptions about e-invoicing

A number of misunderstandings around the e-invoicing mandate persist stubbornly and can lead to bad decisions. Here we clear up three of them:

A PDF is surely enough

Wrong. A plain PDF does not meet the requirements for a structured e-invoice once the transition periods expire. Only a machine-readable format such as XRechnung or ZUGFeRD is legally compliant.

This only affects large companies

Wrong. From 2028 at the latest, the sending obligation applies to all domestic companies in the B2B sector, regardless of size. And the obligation to receive has applied to everyone since 2025 anyway.

I still have until 2028

Risky. Companies with more than 800,000 euros in revenue are already obliged to send from 2027. And regardless of that, all incoming e-invoices must already be processed and archived correctly today.

How SMBs prepare properly now

The changeover works best in clear steps. First check whether your current software can create and receive e-invoices. Clarify from when exactly you will be obliged to send, and set up an audit-proof archive.

• Check your accounting or ERP software for e-invoicing capability
• Determine your own revenue threshold for 2026 and set your deadline
• Set up a receiving channel for incoming e-invoices
• Ensure GoBD-compliant archiving
• Train your accounting staff

Turning the obligation into an advantage

The e-invoicing mandate is often seen only as a tiresome requirement. In fact, it holds considerable efficiency potential. Structured invoice data can be captured, checked and posted automatically. Manual retyping disappears, typing errors become rarer and the approval process speeds up noticeably.

Those who approach the changeover thoughtfully benefit several times over:

• Faster processing and shorter turnaround times in accounting
• Fewer errors thanks to automatic data transfer
• Better liquidity planning thanks to transparent invoice statuses
• Lower costs for printing, postage and paper archiving
• Smooth connection to tax advisors and banks

The legal obligation thus becomes a real modernization push for your digital business processes. The only important thing is not to view the changeover in isolation but to embed it in the entire workflow from quote to incoming payment.

A practical tip: talk to your tax advisor and your most important business partners early. When suppliers and customers align their systems with each other, data exchange runs smoothly and the benefits of automation come fully into play. A small investment in preparation saves a lot of manual rework later and avoids queries about formally incorrect invoices.

Conclusion

The e-invoicing mandate is not a short-term project but a fundamental changeover of your invoicing processes. With the sending obligation from 2027 and the full obligation from 2028, there is not much time left. Those who tackle receiving capability, the right formats and clean archiving now are not only on the safe side legally but also benefit from faster workflows and less manual work. The best time for the changeover is therefore not shortly before the respective deadline, but now, while you can still plan and test calmly.

Not sure whether your software is already fit for e-invoicing or what audit-proof archiving looks like? Cryon supports SMBs in Leipzig and Saxony in selecting suitable solutions, integrating them into your accounting and implementing everything in a GoBD-compliant way. Arrange a no-obligation consultation - we make your invoicing processes future-proof.