The Key Challenges in Implementing E-Invoicing
The mandatory introduction of e-invoicing is drawing nearer. What long seemed like a topic for the future is increasingly becoming a time-sensitive project. Starting January 1, 2027, not only will receiving electronic invoices be mandatory in Germany, but so will sending them.
For you, this means much more than just a technical update. You’ll need to plan Business Central upgrades, review processes, clarify legal requirements, and conduct extensive testing. If you wait until shortly before the deadline to begin implementation, you risk time pressure, bottlenecks, and unnecessary operational issues.
The deadline cannot be postponed
The introduction of e-invoicing is no longer a long-term IT initiative, but rather a project with a fixed deadline. As of January 1, 2027, it will no longer be possible to send invoices through alternative channels.
Therefore, it is advisable to structure the project plan working backward from the go-live date. In addition to allowing sufficient time for troubleshooting, you should also define escalation procedures and set clear milestones. These include, for example, approval of the Business Central upgrade, interface testing, a pilot run, legal acceptance, and the subsequent rollout.
Another important point is to involve your Business Central partner early on. Since many companies are currently preparing their systems for e-invoicing, workload is increasing, and with it, lead times. At the same time, you should coordinate with corporate customers and suppliers early on to determine which invoice formats and transmission methods will be used in the future.
A successful testing phase is key to the project's success
In many projects, the actual testing phase is underestimated. Yet it often determines whether the rollout goes smoothly or whether unexpected problems arise just before go-live.
You should take typical bottlenecks into account as early as the scheduling phase. Testing phases during summer break or around Christmas make coordination significantly more difficult, as key users and external partners are often only available on a limited basis. The end of the year can be just as critical, when financial accounting and other departments are already working at full capacity.
That’s why you should reserve the necessary resources well in advance. In addition to project management and IT, this applies in particular to key users, tax and compliance officers, as well as external service providers and implementation partners.
In addition to standard functional tests, it is also advisable to conduct load tests with larger invoice volumes. This allows performance or batch processing issues to be identified before they occur in production.
The choice of format affects more than just the technology
Choosing an invoice format not only sets the technical course but also influences organizational and legal requirements.
For many public contracting authorities, XRechnung via PEPPOL is mandatory. In the B2B environment, however, ZUGFeRD has become the standard. The hybrid invoice combines a readable PDF file with a structured XML file and is therefore used by many companies.
At the same time, you should also review the legal framework. Do the existing terms and conditions already permit electronic transmission via email or PEPPOL? Do receipt agreements need to be updated? And is it ensured that archiving complies with GoBD requirements and that the integrity and readability of the documents are guaranteed throughout the entire retention period?
Would you like to learn more about GoBD in the ERP environment? Then feel free to read our article “GoB, GoBD & IDW RS FAIT 1: What Does This Mean for ERP Systems in Practice?”
Standard e-invoices are reaching their limits in practice
During implementation, it often becomes apparent that the standard features of Microsoft Dynamics 365 Business Central do not fully cover all requirements. Text lines are a typical example. The standard XML cannot include all the information visible on a traditional PDF invoice. You should therefore carefully review which information must be included in the XML file.
Item descriptions can also pose challenges. Long or multi-line descriptions are often truncated or split across multiple line items. In addition, the standard e-invoice implementation in Business Central does not output text lines.
Another issue concerns general ledger accounts and resources. These are output as items, which can lead to incorrect categorizations in the recipient’s system.
If important details are missing as a result, an additional supplementary sheet may be required, for example, as a separate PDF or supplementary XML attachment. Before using this approach, however, you should check with your tax advisor and the relevant recipients to ensure that this solution meets compliance requirements.
Every detail counts before the rollout
Before you begin sending your first e-invoices in production, you should thoroughly review all sample invoices. It is not enough to simply check the PDF version. Instead, you should compare the generated XML file with the sample invoice to ensure that all information relevant to the recipient(s) is included in full.
It is also recommended to validate the documents against EN 16931 or the respective e-invoice profiles. Your tax firm or compliance officer should then legally approve the sample invoices. You should also review the planned email delivery with a PDF attachment to ensure its legal validity and compliance with archiving and documentation requirements.
The Business Central update is more than just a version upgrade
Microsoft is continuously developing the standard module for e-invoicing and has already announced additional bug fixes. Therefore, you should plan to upgrade to the latest version of Business Central in a timely manner. Would you like to update your Business Central solution? We can help! Contact us, and we’ll assist you with upgrading your ERP system.
However, it’s important to note that it’s not just Business Central itself that needs to be updated. All extensions must also be migrated and tested. The more complex the system landscape, the greater the time and resource requirements.
In addition, it’s advisable to perform regression tests and prepare rollback scenarios. This allows you to react quickly in the event of unexpected problems.
Test first, then go live
Before the final rollout, the implementation should go through several testing phases. These initially include unit and integration tests, which verify the technical generation of the XML files as well as any attachments or signatures.
Next, end-to-end tests should simulate the entire transmission process via PEPPOL or SMTP, including acknowledgment of receipt and automatic processing by your recipients. Test runs with key customers are also advisable. This allows you to identify early on whether information is missing or being interpreted differently than expected by the recipient’s system.
Before the e-invoice is finally rolled out company-wide, it is recommended to conduct a pilot transmission with a smaller group of recipients. The full-scale rollout should only take place after this pilot phase has been successfully completed and legally compliant approval has been granted by your tax firm or compliance department.
Management Checklist
With this short checklist, you'll have all the key points you need to check off right at your fingertips:
Our conclusion
The introduction of e-invoicing is no longer just an IT issue. Rather, it is a cross-functional project that requires close collaboration between the technology, compliance, financial accounting, procurement, and sales departments.
By tackling upgrade planning, testing phases, and legal approvals early on—and setting aside enough time for corrections following pilot runs—you’ll lay the groundwork for a smooth transition to the mandatory use of electronic invoices starting January 1, 2027. We’d be happy to assist you in planning the implementation of e-invoicing. Give us a call, and we’ll advise you in a one-on-one consultation.
Do you have any questions?
You can find more information on our website about e-invoicing.
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About the author
MARTIN BENZIN · Senior Functional Consultant
Over 28 years of professional experience in application development and project management in more than 30 countries.
My extensive experience in the BC and NAV environment has served as strong professional and technical support for several large and small medium-sized companies throughout my career. In the process, I have become familiar with many industries, such as mechanical engineering, special machine construction, the automotive industry, and power tool manufacturing. There, I supervised several projects involving the introduction and upgrade of ERP solutions.
These experiences have given me in-depth expertise in complex solution environments and large projects.
- The deadline cannot be postponed
- A successful testing phase is key to the project's success
- The choice of format affects more than just the technology
- Standard e-invoices are reaching their limits in practice
- Every detail counts before the rollout
- The Business Central update is more than just a version upgrade
- Test first, then go live
- Management Checklist
- Our conclusion
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