Providing invoice data digitally has fundamental benefits for both the business sector and public administration: quicker and more efficient work processes, fewer late payments as well as lower printing and postage costs. This in turn reduces errors and improves transparency, while the procedural steps involved in processing invoices are made quicker overall.
ZUGFeRD 1.0 is designed to achieve these objectives, most notably for those parties which only issue a small number of invoices to one partner each year or for parties which sometimes or even exclusively deal with partners without a regular business relationship. To achieve this aim, electronic invoices should be just as easy to send and receive as paper invoices.
In collaboration with FeRD, various partners from the private and administrative sector have developed a data format called ZUGFeRD. The ZUGFeRD approach builds on a combination of PDF with integrated structured data. It is based on a core invoice, which leads to easy implementation. Basic idea of ZUGFeRD is that everybody should be able to exchange electronic invoices without consultation or agreement in advance. The ZUGFeRD data format for electronic invoices is available for free in its version 1.0.
The vast majority of e-invoices are issued as XML (extensible markup language) which integrates fairly well with the most commonly used ERPs. The XML carries the same information as a paper based invoice does, but in an electronic format. The XML consists of some key structures and is comparable to JSON´s key-value structure, it also inherits a hierarchy within the file. However, to establish a machine to machine connection between supplier and buyer the XML generally needs to be transformed. This transformation is done with the language XSLT (Extensible Stylesheet Language Transformation).
The original XML is transformed into a new XML which is readable by the buyer´s ERP and enables the direct connection to the Accounts Payable (AP) system. From this point on the invoice can be posted into the buyer´s ledger and will eventually, after an internal approval process, be paid.
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