E-invoices in Germany: ZUGFeRD or XRechnung?

The digitalization of business processes is moving quickly – and the way companies exchange invoices is no exception. In Germany, several electronic invoice formats are now available that not only meet legal requirements but also support greater efficiency and automation in finance and accounting.

But which formats are available, which are legally recognized and how do they differ? These are key questions for decision-makers in IT, accounting and finance who are working to build compliant, future-ready processes.

This article offers a clear overview of the most important e-invoice formats in Germany – and aims to help you make the best choice for your business.

Until a few years ago, most invoices in Germany were sent in hard-copy form. This process often involved significant manual effort, time and a higher risk of errors for everyone involved. With the digital transformation, new invoice formats and transmission methods have gradually taken hold – most notably, the commonly used PDF invoice sent by email.

While PDF invoices offer a quick and cost-effective digital option, they don’t support automated processing. In contrast, true electronic invoices – structured formats like XML – can be integrated directly into ERP systems to enable full process automation. In Germany, these formats remained relatively underused for many years.

Until now. Since January 2025, Germany’s statutory e-invoicing requirement has been gradually coming into effect. By 2028 at the latest, (almost) all invoices in the business-to-business and business-to-government sectors will need to be exchanged using EU-compliant e-invoicing formats.

That’s reason enough to take a closer look at the two most important e-invoicing formats currently used in Germany.

ZUGFeRD (Zentraler User Guide des Forums elektronische Rechnung Deutschland) is a hybrid invoice format that combines a PDF version with embedded XML data. This gives businesses a flexible solution that supports both traditional PDF-based workflows and automated digital processes.

Invoices in the ZUGFeRD format are especially appealing for companies looking for a smooth transition to electronic invoicing. ZUGFeRD acts as a bridge between analog and digital processes: recipients can read the familiar PDF file while ERP systems can automatically process the embedded XML data. This reduces the risk of errors, saves time and enables seamless integration into existing workflows.

XRechnung is the invoice format mandated by the German administration for B2G (business-to-government) transactions. It was developed to ensure standardized, digital, and machine-readable invoicing within the public sector. The format is based on a structured XML data set that enables seamless, end-to-end digital processing.

Since 27 November 2020, all public sector suppliers have been required to use XRechnung. Unlike ZUGFeRD, which offers a hybrid model, XRechnung is purely XML-based. This eliminates the need for manual processing steps—although it may be less intuitive for the human reader to interpret.

The key difference between ZUGFeRD and XRechnung lies in their structure and intended use. ZUGFeRD, as a hybrid format, includes both a human-readable PDF and machine-readable XML data. XRechnung, by contrast, is a purely XML-based format developed specifically for use in the German public sector.

ZUGFeRD is well suited for companies looking for a flexible transition to digital invoicing. XRechnung, on the other hand, is mandatory for businesses issuing invoices to public authorities. For companies operating across Europe, it’s also worth preparing for the harmonization of e-invoicing standards in the near future. 

The move to electronic invoicing is more than a technical shift – it’s a key step in the broader journey toward digital transformation.

Companies that take the time to understand the available formats early and align their processes accordingly stand to gain real advantages. Automated invoice processing can reduce manual errors, speed up payment cycles and support more accurate liquidity planning.

And with legal requirements becoming more stringent, it’s clear that this is not just a trend—but a necessary change that businesses will need to address.

Companies that embrace electronic invoicing today not only ensure regulatory compliance but also position themselves for long-term competitive advantage.

ZUGFeRD offers a flexible path for a gradual transition while XRechnung is already mandatory for working with public sector entities.

By addressing the relevant standards early and planning the transition strategically, businesses can unlock efficiency gains and elevate their accounting processes across the organization.

Now is the ideal time to set the course for digital invoice processing – with a centralized solution that helps you take full advantage of automation.