The difference between XRechnung and ZUGFeRD

by | Jan 17, 2024 | E-invoicing

The introduction of electronic invoices has proven to be an efficient way of optimizing the management of invoices and financial data. Two terms that frequently crop up in this context are “ZUGFeRD” and “XRechnung”. But what exactly do they mean and how do they differ from each other? In this blog post, we will take a closer look at the differences.

What Is an Electronic Invoice?

Before we turn to the differences between ZUGFeRD and XRechnung, let’s clarify what an electronic invoice actually is. Essentially, it is an invoice that is in an electronic format and can therefore be transmitted, received and stored digitally. This means that you can avoid paper documents and manual processes, saving you time and resources.

What Is the Difference Between an Electronic and Digital Invoice?

Before we turn to the specific standards ZUGFeRD and XRechnung, it is important to understand that there is a difference between electronic and digital invoices. A digital invoice is an invoice in an electronic format, but it can still be an image file or PDF document. An electronic invoice, on the other hand, is a machine-readable document that contains structured data that can be processed by computer systems. Both are an improvement over paper invoices, but electronic invoices allow for even more efficient processing and automation.

What Is ZUGFeRD?

ZUGFeRD stands for “Zentraler User Guide des Forums elektronische Rechnung Deutschland”. It is a German standard for electronic invoices. The special thing about ZUGFeRD is that it combines both structured data and a visual PDF document in one file. This facilitates communication between companies and enables seamless integration into existing processes. ZUGFeRD is flexible and can be used in various industries and company sizes.

What Is XRechnung?

In contrast, XRechnung is a specific standard that was developed as part of the German government’s e-invoicing initiative. XRechnung is a purely structured data exchange standard and is based on the European standard EN 16931. This means that XRechnung only contains machine-readable data and does not include a visual PDF document. It was developed to improve interoperability and data exchange between companies and public administrations.

Although XRechnung is based on XML, it is not an XML invoice per se. We have written more about the difference between an XML invoice and an e-invoice in our other blog post.

The Difference Between Formats

The decision between ZUGFeRD and XRechnung for B2B electronic invoices depends on various factors, including the requirements of your business partners, your own internal processes and your preferences. Both standards have their pros and cons. Here are some considerations:

ZUGFeRD:

  1. Combined format: ZUGFeRD makes it possible to combine structured data and a visual PDF in a single file. This facilitates communication as business partners can easily read the visual invoice.
  2. Flexibility: ZUGFeRD is flexible and can be used in different industries and company sizes. It offers different profiles, including “Basic” and “Comfort”, depending on the requirements.
  3. Distribution: ZUGFeRD is widely used in Germany and accepted by many companies.
  4. Integration: There are a large number of software solutions and service providers that support ZUGFeRD, which facilitates integration into existing systems. It is also possible to use the country-specific solution, which creates an invoice in ZUGFeRD format.

XRechnung:

  1. Purely structured format: XRechnung is a purely structured data exchange standard and is based on the European standard EN 16931. It does not contain any visual PDF documents.
  2. Standardization: XRechnung is a standardized solution specifically developed by the German federal government to facilitate data exchange between companies and public administrations.
  3. Interoperability: Due to its standardization, XRechnung is well suited for data exchange with public institutions and authorities in Germany.
  4. Future-proof: As XRechnung is based on European standards, it may gain wider acceptance in the future and possibly facilitate interoperability with other European solutions. This is particularly relevant due to the upcoming ViDA regulation.

Conclusion

The choice between ZUGFeRD and XRechnung should depend on your individual business requirements. If your business partners or customers already use or prefer one of the standards, you should be guided by their requirements. If you want more flexible options and the ability to create visual invoice documents, ZUGFeRD may be attractive. XRechnung, on the other hand, offers a standardized solution that is particularly suitable for working with German authorities.

However, we recommend that you familiarize yourself with the current requirements and developments in your market and, if necessary, consult with your business partners and tax advisors to make the best choice for your B2B electronic invoices.

Overall, both ZUGFeRD and XRechnung are important steps towards more efficient and digital management of invoices and financial data in Germany. However, the main difference between them lies in their approach: ZUGFeRD combines structured data with a visual PDF, while XRechnung relies exclusively on structured data. The choice between the two standards depends on the individual needs and processes of your company. In any case, they offer the opportunity to optimize invoice exchange and increase efficiency.

Aleksandra Vovchenko
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