Digitalization of Business Processes in Federalist Environments: The Introduction of E-Invoicing in Germany

In this article we will analyze the government-driven introduction of e-invoicing in Germany. The decision to digitalize the invoicing processes in Germany is based on an EU guideline that instructs all member states to switch to electronic invoicing (e-invoicing) within their administrations. The European Union thus aims to achieve a facilitation of trade across inner-European borders, as well as more transparency for the fiscal authorities. Germany, as a member state, has made e-invoicing mandatory for all national administrations, since 27 November 2020. At the same time the federal states of Germany have their own jurisdiction, which presents unique problems for the introduction of standardized solutions. For this study, several experts, representing the different stakeholders of invoicing processes were interviewed. The results are showing that while the interest in e-invoicing solutions is high among all stakeholders of invoicing processes, the implementation in the German market comes with a unique set of challenges that are putting the success of e-invoicing in Germany at risk. The government-driven digitalization of processes is therefore heavily impacted by the fact whether a country has a federal structure or not.