E-invoicing: What it is and why it’s only the start of B2B payment transformation​

I've never been one to get excited about compliance rules, but lately, my perspective on e-invoicing has completely shifted.

What once felt like a tedious requirement is now an exciting change in the way businesses handle payments. It's not just because it's necessary — it's because it opens up significant opportunities for everyone involved.

Recently, e-invoicing has become a major focus for businesses, especially in manufacturing and consumer electronics. Across Europe, new regulations are being implemented quickly, requiring companies to adopt electronic invoices. But, it's about more than just compliance.

Before we delve into the details, let’s first outline what e-invoicing is.

‘E-invoicing’ is another way of saying ‘electronic invoicing’ between a supplier and buyer. In short, these are computer-generated invoices, delivered in a structured digital format, which can be sent automatically or on your click. This means no more paper, saying goodbye to traditional written invoices and hello to more efficient processing.

More and more UK businesses are choosing to switch to e-invoicing because it can save costs and increase efficiency. For many, it also means enhanced compliance, improved accuracy, and faster payments.

The European standard on e-invoicing (EN16931) defines the structure of these documents. However, it’s important to know that an e-invoice will need to be written in a machine-readable format. This means it can be automatically imported into a buyer’s Accounts Payable System without manual input. They should not use images or be in PDF format.

Every e-invoice should contain essential information such as amounts, descriptions, and quantities, and be rendered in a visual way so they can be used in physical form (if needed). Acceptable formats include XML or UBL.

As part of Digital Reporting Requirements reforms of the EU VAT in the Digital Age package, from 1^st July 2030, only e-invoices must be submitted for the supply of goods or services across EU borders. This means that paper invoices will no longer hold the same level of legal status, and an online switch will be required by businesses that trade internationally.

While no longer a member of the EU, the UK has already begun adopting e-invoicing mandates to save taxpayer money and now requires e-invoices for the public sector.

Ahead of 2030, and beyond, any businesses sending or receiving invoices will be impacted. At Allianz Trade, we’ve decided to act sooner rather than later.

In our March 2025 Global Insolvency Report, the Allianz Trade team commented on these changes and the influence they could have on businesses. It was stated that wide adoption of e-invoices should reduce payment terms by 20% and administrative costs of processing invoices by 30%.

The report goes on to say:

‘This proposal is a game-changer for e-invoicing across Europe as the text introduces several key requirements, with the main one being a Single European VAT One-Stop-Shop (OSS) for the registration of a company from July 2028, and, from 1^st January 2030, an EU-wide standardisation of national e-invoicing systems from structured electronic invoices will be the default system for issuing invoices.

‘Electronic invoicing will become mandatory for intra-community transactions and member states will have greater flexibility to implement a national electronic invoicing system.’