E-Invoicing with SAP in Germany: Requirements, Preparation and Updates for 2026

Germany is another country moving forward with its digitalization strategy by introducing mandatory electronic invoicing for B2B transactions starting 1 January 2026. The European push toward standardized, real-time VAT reporting requires businesses to issue and receive invoices in a structured, machine-readable format, rather than traditional PDF or paper. In Germany, the standard formats will be XRechnung and ZUGFeRD, both compliant with EU standard EN 16931. In this article, we have summarized the key regulatory changes, what they mean for SAP users, and how companies operating in Germany can prepare their SAP systems for e-invoicing integration.

What is Changing in Germany?

From January 2026, all VAT-registered businesses involved in domestic B2B transactions will be required to issue and accept only electronic invoices, with the exceptions being B2C transactions and cross-border supplies that will remain unaffected for the current time being.

Due to the mandatory XRechnung and ZUGFeRD structure, SAP customers must use SAP Document and Reporting Compliance (DRC) for invoice generating and ensure integration with recipients via email, Peppol or direct API channels. It is important to note that  XRechnung is Germany’s official XML format that provides a quicker integration into public-sector systems, whereas ZUGFeRD combines machine-readable XML with a human-readable PDF, making it easier for B2B invoices.

However, depending on whether you use the SAP S/4HANA on Premise or the Public Cloud version, you need to consider the different integration approaches. For on-Premise deployments, invoice data is typically generated via IDocs or BAPIs and routed through a compliant output channel or integrated with a third-party e-invoicing service, whereas in SAP S/4HANA Public Cloud, SAP Document and Reporting Compliance (DRC) combined with SAP Cloud Platform Integration (CPI) enables native, end-to-end e-invoicing aligned with legal mandates.

These regulatory changes place significant responsibility on CFOs and Finance Managers to ensure that all outgoing and incoming invoices are transitioned from traditional PDF or email-based workflows to structured XML formats, in full compliance with German tax law. Additionally, Accounts Payable (AP) and Accounts Receivable (AR) teams must be adequately trained in the new validation and processing procedures to support a smooth and compliant transition ahead of the 2026 deadline.

How to Prepare with SAP

A successful transition to Germany’s upcoming e-invoicing mandate lies in maintaining good master data quality. Inaccurate customer or vendor records, incomplete tax data or outdated company details can all lead to invoice validation failures under the new structured XML formats. This is why we, at vAIsko, highly recommend getting back to our initial article, in order to get a better overview on how we can help your company obtain clean and accurate master data. Alongside this foundational step, companies face some other challenges such as aligning communication flows with suppliers and customers or testing their integration between SAP systems and external platforms.

To prepare on time, organizations should begin by reviewing current invoice templates and identifying any gaps with respect to the new standards. For those on SAP S/4HANA, enabling SAP Document and Reporting Compliance (DRC) or defining an alternative compliant output channel is a must. Early testing of structured invoice exchange with selected business partners helps uncover issues before the mandate goes live. Finally, internal policies must be updated to include clear procedures for XML validation, error handling and archiving, ensuring that finance and IT teams are aligned for 2026 and any potential fines or sanctions are not in the way.