Handling invoices is part of everyday tasks for businesses in Germany. The automation of the relevant processes has led to noticeable acceleration and simplification for accounting departments.

In this article, you will learn what automated invoices are and what benefits they offer. We also explain how these billing systems work, how businesses can set them up and the legal requirements for them in Germany.

What's in this article?

• What are automated invoices?
  
• How do automated billing systems work?
  
• How can businesses establish an automated invoicing system?
  
• What are the legal requirements for automated invoicing in Germany?
  
• What are the advantages of automated invoices?
  

What are automated invoices?

Automated invoices are documents that are created, processed, sent, received and archived without manual input by people. In contrast to traditional billing, where employees manually enter details into templates, check invoices and send them, automation is based on software solutions. These tools convert customer data, orders and contracts into complete invoices.

Historically, invoice handling was purely paper-based; however, the introduction of word processing programs and email simplified the task. The next step was the arrival of enterprise resource planning (ERP) suites and cloud-based accounting tools that generate invoice data directly from other business transactions, such as purchase orders. Today, modern systems take it a step further: they ensure straightforward integration with payment service providers and create e-invoices aligned with international standards. They can issue recurring invoices and dunning letters entirely on their own.

How do automated billing systems work?

These frameworks facilitate the management of incoming invoices and the drafting of outgoing ones while remaining compliant with national law.

Incoming invoices

The software can import incoming invoices directly from email. If they arrive as paper documents, simply scan and upload the files into the program. Alternatively, you can forward the scan to a central inbox, such as "invoices@business.de", for automatic processing.

The core element is OCR (optical character recognition) technology. Using semantic text analysis, OCR extracts figures such as payees, amounts and due dates. With classic OCR solutions, businesses rely on templates that are set up once for each layout.

After extraction, the system sends it to pre-defined locations – for example, an internal file folder, the finance team or external tax advisors. Newer tools go further with artificial intelligence: AI-supported platforms recognise content without templates and automate tasks such as pre-accounting and the assignment of release managers.

Outgoing invoices

With automated invoicing, the application independently generates bills using customer details already on file. It fills invoices with buyer data, line items, prices, tax rates and settlement terms, then sends the finished documents by email or via dedicated portals. After drafting, the outgoing invoices are archived and forwarded directly if necessary. This creates a consistent, transparent process, from billing to book entry.

The approach is particularly recommended for recurring charges such as subscriptions, as it enhances the workflow. Stripe Billing provides businesses in Germany with a tailored software solution. Billing also enables the management of accounts and direct access to detailed financial and sales reports within the dashboard. Customers can likewise manage their subscriptions via the self-service portal.

How can businesses establish an automated invoicing system?

Establishing an automated invoicing system requires a clear strategy. Follow these five steps to get started:

1. Define requirements

Before buying or subscribing to an application, analyse what you truly need. Create a list of the core features and a second "nice-to-have" list.

Consider the skills of your employees – a platform needs to be not only powerful but also intuitive to use. When searching for suitable software tools, functionality and handling are just as important as costs.

2. Compare solutions

Once you have defined your criteria and identified possible platform tools, compare them critically. Pay attention to the functional depth of automated invoice processing, the quality of OCR recognition, and the potential for straightforward integration into your current accounting systems. Consider aspects such as user-friendliness, support, legal compliance and flexible scalability. It is also worth reviewing references and existing user testimonials to better assess suitability.

3. Implement and test the system

After selecting the appropriate solution, technical implementation takes place. Set up the platform so that all defined requirements are mapped. Ideally, your service provider will help you with this, as well as with connecting to current systems.

Start with a pilot project to test automated invoicing on a small scale. Identify a clearly defined area, such as invoices for a specific product or specific client group. Use this test run to identify technical issues early on and to assess user-friendliness in everyday use. Furthermore, train your employees who work directly with the platform.

4. Automate invoice flow

After completing the test phase, you can fully automate your billing procedure. The platform will then handle both incoming and outgoing invoices from end to end.

5. Refine the process

After a successful implementation, you should regularly review the systems and enhance them as necessary. Is everything running smoothly? Are there any new requirements? Can additional processes be digitised?

What are the legal requirements for automated invoicing in Germany?

Businesses in Germany must comply with national and European laws and rules regarding automated invoicing. There are applicable regulations for incoming and outgoing bills.

German VAT Act

Whether an invoice is created manually or automatically, it needs to comply with the German VAT Act (UStG). For example, it must contain all mandatory information required by Section 14 of the UStG:

• Full name and address of the company providing the product or service
  
• Full name and address of the recipient of the product or service
  
• Date of the invoice
  
• Delivery date of the product or service
  
• Tax number issued to the supplying business by the tax office or the value-added tax identification number (VAT ID) issued by the Federal Central Tax Office
  
• A sequential, unique invoice number
  
• The quantity and type of products delivered or the scope and type of service provided
  
• Gross and net amount
  
• The applicable tax rate and the corresponding amount or – for exemptions – a legal reference
  

With a proper setup, the system can automatically generate invoices with all the necessary details entered accurately.

GoBD

Automated invoicing must comply with the principles for the proper keeping and retention of books, records and documents in electronic form (GoBD). As an administrative regulation of the Federal Ministry of Finance, the GoBD defines the basic principles of digital accounting in Germany. This includes numerous rules for businesses regarding the recording, managing and archiving of tax-relevant files.

The GoBD requires businesses to store all automated invoices safely and in a format that is both auditable and protected. Invoices need to remain unchanged and verifiable at all times. Incoming and outgoing invoices must be retained for a minimum of 10 years and stored in a secure location that prevents tampering, damage or loss.

You need to also document the entire invoicing and processing workflow clearly and traceably, covering every step from production to approval and delivery.

E-invoice standards

In addition to the specific requirements of the UStG and the GoBD, organisations that issue e-invoices need to comply with the relevant standards for electronic billing. As of 2025, businesses in Germany are obliged to issue B2B sales as e-invoices (Section 14(2)(2) of the UStG). These rules were established at the European level and regulate the creation, transmission and archiving of invoices in digital form.

When using automated invoicing, it is key to ensure that bills are generated in a recognised format, such as XML. The XRechnung and ZUGFeRD invoices are suitable for this purpose. It is also important that the electronic delivery is legally secure and traceable for both parties.

Data protection

When transferring and archiving invoices, businesses need to guarantee that all personal details are handled in line with the General Data Protection Regulation (GDPR), a European law. This means, among other things, that its info must be sufficiently encrypted and secure during transport and storage.

What are the advantages of automated invoices?

Automated invoicing offers numerous advantages. The following is an overview of the most significant:

Time savings

Automated invoices save businesses valuable time when managing incoming and outgoing bills. Instead of manually handling details or creating them individually, the software manages import and data retrieval, as well as production and dispatch, largely independently. This relieves the accounting department of repetitive, routine tasks, saving effort and resources for other work. Service providers and suppliers can likewise benefit from faster processing, as they could receive their money sooner.

Cost reduction

The reduced workload and associated time savings can lead to cost reductions. Businesses can save on personnel expenses, as well as printing and shipping costs associated with paper bills. Additionally, digital invoices do not need to be archived as paper documents, which reduces the effort associated with archiving.

Error reduction

Manual entries are prone to errors, e.g. typos, transposed numbers and missing mandatory information. Automated invoicing and handling can reduce the error rate. For incoming bills, the system accurately reads relevant details; for outgoing, customer data, totals and tax information are entered automatically. Digital delivery guarantees that the correct recipients receive the documents in the proper format.

Transparency

Automated invoice processing ensures transparency throughout the entire billing flow of a business. Incoming invoices are centrally stored and categorised for easy access. It is possible to check at any point when a bill was received, handled or approved. Outgoing ones are systematically recorded and documented, including all relevant information, such as the shipping date and the payment's due date and status. This provides a consistent overview of open items, settlement deadlines and booking transactions – an important foundation for efficient financial management and improved liquidity planning.

Faster payments

Automatic invoicing for outgoing bills ensures that settlement deadlines start immediately after the service has been provided. In other words, it doesn't take days or weeks for the business to send one out. Immediate billing can strengthen liquidity. At the same time, the automated processing of incoming invoices helps those utilise discount periods more effectively and make timely payments. Accelerated procedures on both sides can improve cash flows and financial management for organisations.

Compliance

Automated invoices facilitate easier compliance with legal requirements. Incoming invoices are archived by the GoBD, while outgoing ones are documented in an audit-proof manner, ensuring records of all processing and shipping activities. This means that businesses can always present complete and traceable data in the event of an audit.

Scalability

Regardless of whether there are a few bills or thousands, automated invoicing operations are scalable and adaptable. Organisations can efficiently handle an increasing amount of incoming invoices and create and send more outgoing ones – without risking staff shortages. Since digital platforms can flexibly adapt and expand processes, they enable businesses to grow and internationalise.

Integration

Modern software for automated invoice creation and handling should integrate smoothly with financing, ERP and CRM platforms to support efficient workflows. Incoming bills can flow directly into the accounting system, while outgoing ones can be generated from customer orders and contracts. Media gaps disappear, processes run more smoothly and data remains available wherever needed.