Electronic Invoices in the SAP World

The manual creation and processing of invoices is process-, time- and cost-intensive. As Germany's largest customer, the public sector therefore categorically demands invoices that can be processed electronically. With XRechnung and ZUGFeRD, two formats are available that meet the requirements. A solution developed by Arvato Systems and certified by SAP brings both formats into the SAP world.

Invoices in the classic sense are a costly affair. Both the issuer and the recipient incur high time and cost expenditures for the manual creation and processing of invoices.

The processes of manual, paper-based invoicing are time-consuming and characterized by high friction losses - the reasons for this include:

• Manual entry of invoice data is error-pron
• Costs for paper, printing, envelopes and postage are considerable
• Deadline management is not transparent
• Receipt of payment is delayed
• Paper invoices have to be laboriously archived in printed form

On the recipient side, the processes are no less complex:

• Receiving invoices on paper and in digital form requires a time-consuming hybrid invoice handling process
• Invoice information must be transferred manually or via text recognition systems into the accounting software - a time-consuming and error-prone process
• Review and approval processes based on paper-based invoices are complex and time-consuming

Electronic invoicing, or e-invoicing, streamlines and simplifies invoicing processes. The goal of e-invoicing is automated, electronic invoice processing. It is obvious that electronic invoices lead to significant cost savings. Validated figures on this are not available, but savings of up to 70% are often cited. This sounds plausible, as the time and effort required to create and process them is of course significantly lower and, incidentally, more sustainable.

Electronic invoices offer a number of benefits beyond the savings compared to paper-based accounting. For example, standardization of the accounting system leads to an increase in transparency and optimization of liquidity management.

Often, an invoice sent as a PDF is already mistakenly considered an electronic invoice. However, it is nothing more than a digital visual equivalent of the invoice. In terms of electronic processing, it is no different from a paper invoice - it too leads to a media break in accounting.

XRechnung - clear focus on XML

The so-called XRechnung avoids such a media break. It is a pure XML-based data model for the transmission of machine-readable invoice data in accordance with the EU Directive. Within the XML code, a PDF of the invoice can be transmitted as a binary string. However, this can only be read by humans using third-party software. This means that XRechnung can be used primarily for electronic invoicing.

ZUGFeRD - Hybrid of PDF and XML

The so-called ZUGFeRD standard offers more flexibility. The abbreviation stands for "Central User Guide of the Electronic Invoice Forum Germany". It describes a data format that also implements EU Directive 2014/55/EU. It is therefore, as is often assumed, not an application software, but a structural description of an invoice data record, which must be supported by the software used in the company.

The advantage of ZUGFeRD: It is a hybrid format consisting of a PDF file with the visual representation of the invoice, in which an XML file with the invoice data is embedded. This makes ZUGFeRD suitable for both traditional and electronic invoicing. In addition, unlike XRechnung, no bilateral agreement is required between the business partners.

ZRE: This is the central billing platform of the federal government (direct federal administration such as ministries). It allows electronic invoices to be submitted and the status of submitted invoices to be viewed. It is also possible to create electronic invoices via a web form, but this will certainly only be practicable in individual cases.

OZG-RE: This invoice receipt portal is compliant with the Act to Improve Online Access to Administrative Services, or OZG for short. It is used by the indirect federal administration (such as corporations, institutions, foundations) as well as some federal states.

To create invoices in the XRechnung and ZUGFeRD formats, it is necessary that the systems used for ERP and accounting support the formats. Arvato Systems has developed a solution for implementing the two formats in the SAP world. This is already being used by a number of companies, such as energy providers, as well as by city administrations.

In the run-up to invoice creation, the solution checks whether the invoice must be created in electronically processable formats or whether a pure PDF invoice is sufficient - relevant factors include, for example, the invoice recipient, the invoice amount and other aspects. Within the framework of the EU directive, invoice recipients are obliged to check whether the respective invoice is correct. In order to avoid correction efforts on both sides, the solution already checks whether the invoice complies with all requirements before transmission.

Arvato Systems has many years of experience in the SAP Finance & Controlling (FICO) environment and in the SD and I-SU modules. This knowledge advantage also flows into our consulting services for the creation of electronically processable invoices. In doing so, we implement specific customer and industry requirements. If there are any changes to the formats, these are implemented automatically.

Arvato Systems offers a comprehensive service package for the introduction of electronically processable invoices:

• Analysis and development of the infrastructure for the use of XRechnung and ZUGFeRD in different system landscapes such as SAP S/4HANA as well as SAP IS-U or other industry-specific applications.
• Consulting and support during the implementation of the solution
• Maintenance and support

Global IT specialist Arvato Systems supports major companies in Digital Transformation. About 3,100 staff in over 25 locations stand for in-depth technology expertise, industry knowledge, and focus on customer requirements. Working as a team, we develop innovative IT solutions, transition our clients into the Cloud, integrate digital processes, and take on IT systems operation and support.

We offer: 

• Comprehensive IT solutions for industries such as retail, media, manufacturing, healthcare, public sector, and utilities 

• Many years of experience in Digital Transformation 

• Expertise in topics such as Artificial Intelligence, Cloud Computing, IT Security, Customer Experience, E-Commerce, and Business Process Management 

• Expertise in many strong technologies and a strong ecosystem with partners such as Amazon Web Services, Google, Microsoft, and SAP 

• A wide range of infrastructure services, such as Managed Services as well as Application Management based on them 

As a part of the Bertelsmann-owned Arvato network, we have the unique capability to work across the entire value chain. Through our strong strategic partner network with global top players such as AWS, Google, Microsoft, and SAP, we continuously strengthen our know-how and leverage the most advanced technology.