What is an Invoice? Definition and meaning
An invoice, also called “invoicing”, is a financial document. It is a request from a company to its customer to pay the agreed remuneration for a service rendered.
Invoice vs mathematical calculation: which one is meant
In everyday German, the word for invoice (“Rechnung”) is also used in the sense of a mathematical calculation or sum (“to draw up a calculation”). In a commercial context and in business software, however, it refers exclusively to the financial document: a document that asks the customer to pay for a service rendered. Here the term always refers to that financial document, which is what this article is about.
Contents of an invoice
An invoice bills delivered goods or services. The basis for this is, for example, an order or a purchase contract. Under §14 UStG, the following items must be listed in an invoice:
- Name & address of the supplying company,
- Tax number & VAT ID of the supplying company,
- Name & address of the customer,
- VAT ID of the customer (only if the service was provided tax-free within the EU),
- Date of the invoice,
- Date of delivery/service,
- Unique, sequential invoice number,
- Description of the delivery / service & quantity,
- Invoice amount (subdivided into net amount, tax rate & amount, gross amount).
Not legally required, but relevant, would also be details such as:
- Customer number,
- Payment deadline,
- Bank account details (e.g. also as a QR Code),
- Contact details.
Sending & retaining invoices
Invoices can be transmitted in paper form or electronically as an e-invoice.
In addition to digital archiving, e.g. with a digital document entry system or simply in a file management system, you must, based on legal requirements that changed on 01.01.2025, retain them for 8 years in paper format or, in the case of e-invoices, in digital form. The retention obligation always begins and ends on 31 December of a year.
QR Codes and ZUGFeRD
With the help of QR Codes (GiroCode or SwissQR Code) on the invoice, payment can be made easier for customers. The invoice is created with a QR Code that summarises all payment information. This allows customers to transfer the payment quickly and without errors directly after scanning the code.
ZUGFeRD invoices are a format of e-invoices that format these when created so that systems can automatically read these PDF formats and thus digitise them immediately.