Advancing digitalization is a decisive factor in the areas of accounting and bookkeeping. After all, managing invoices digitally has many advantages, first and foremost more efficient processes and therefore cost and time savings. In Germany, e-invoicing has been mandatory in the B2B sector since January 1, 2025 (with transitional regulations until 2028). In Austria, too, a legal regulation is only a matter of time. An early switch to digital invoice management is therefore advisable.

Until recently, electronic invoices in PDF format or similar formats were considered digital invoicing. The EU standard EN16931 has fundamentally changed this. Whether by post or as an email attachment, the outdated form of invoicing requires many work steps and resources. Thanks to automated processes, digital invoice management is much faster and more efficient. This means less effort for employees, reduced susceptibility to errors and increased sustainability throughout the entire accounting process.

We provide you with comprehensive advice on electronic invoice management, both in terms of invoice creation and invoice processing. With our support, you and your company will benefit from digital invoice management in no time at all.

Traditional vs. Digital Invoice Management: a Comparison

When it comes to managing invoices, many companies still use the classic, manual method of traditional invoice management. Although this type of invoice processing involves electronic steps, it is also referred to as analog invoice processing. The invoice is entered, checked and filed manually.

In many cases, all invoices are also printed on paper and archived. This results in a number of disadvantages for the company. Greater susceptibility to errors and time-consuming processing due to manual input processes lead to delays and inefficiency in invoice processing.

Digital invoice processing, on the other hand, offers great savings potential in terms of time, resources and finances. Automated processes result in precise and fast processing of outgoing and incoming invoices. The presentation of all invoices and associated information is clear and standardized. Invoices do not need to be printed out or archived – all of this is done automatically. This gives employees more time for more important tasks, which in turn increases the company’s productivity and efficiency.

What is Digital Invoice Management?

Digital invoice management refers to the digital processing, organization and documentation of invoices. This type of invoice management is purely electronic and is supported by special software. Digital invoice processing is very time and cost efficient. Modern software ensures that all invoices are processed automatically. The digitized processes are documented transparently so that employees can access relevant information quickly and easily.

Digital invoice management is increasingly becoming the status quo in accounting. In Germany, e-invoicing has been mandatory in the B2B sector since January 2025 – with a transitional period until 2028. This obligation has already applied to suppliers to the federal government since 2020. It should be noted that companies must be able to receive e-invoices from 2025 onwards without any transitional period. Only the switch to digital invoicing is subject to transition periods.

In Austria, too, invoices to federal government departments and public administration have had to be issued electronically for years. The e-invoicing obligation for all companies has not yet been introduced. However, it is to be expected that such a legal obligation will be introduced in the near future. In any case, the changeover is already worthwhile, not least because of the close cooperation between the two countries.

How Does Digital Invoice Processing Work?

The digitization of invoices follows a certain pattern. It is a structured process for which dedicated software is used.

free-com’s digital invoice processing follows an automated process:

8 Advantages of Digital Invoice Management for Companies

Digital invoice processing is a major asset for companies in many respects. We will show you how much you can benefit from switching to automated invoice management.

1. Lower costs through digital processes

Digital invoice processing ensures lower costs in several areas. Electronic processing eliminates expenses for printers and paper. The automated processes ensure that invoices are processed more quickly and with less manpower. Employees can devote themselves to more important tasks and use their working time more efficiently.

2. Faster processing through automated workflows

Receiving, processing and archiving invoices automatically takes far less time than processing them manually. The processing time for incoming invoices is significantly reduced. These automated workflows save an enormous amount of time throughout the entire accounting process.

3. Greater transparency and traceability

Specialized invoice processing software ensures that the exact status of all invoices can be viewed at any time. This makes the entire workflow completely transparent and traceable. Relevant information and processing procedures are clearly documented, archived and can be accessed in real time.

4. Fewer errors during invoice verification

The elimination of manual entries reduces the susceptibility to errors during invoice verification. All workflows are subject to automated processes and incorrect entries are virtually impossible.

5. Location-independent access and better collaboration

The corresponding software for digital invoice processing enables access anytime and anywhere. All employees have access to the same information, without lengthy consultations and system updates. In times of increased mobility and flexible workplace design (home office, etc.), this is a great advantage for companies.

6. Environmental friendliness due to paperless processes

Paper-based accounting and archiving have become obsolete in many respects. Last but not least, the focus here is on sustainability. Electronic invoices do not require paper. They are automatically created, processed and archived electronically. There are no CO₂ emissions from transportation and no paper waste.

7. Scalability and integration with existing systems

Modern cloud services for digital invoice processing make companies more flexible and secure. They have extensive and advanced encryption technologies and security protocols. Cloud solutions are also scalable, meaning they grow with the company. Digital invoice processing can also be seamlessly integrated into the Microsoft 365 environment. For example, invoices can be approved directly in the MS Teams interface.

8. Facilitated international business activities

Electronic invoices are subject to the European standard EN16931. This standard specifies which electronic formats are considered e-invoices. These include XML, UBL and EDIFACT. This European standard significantly simplifies invoicing within the EU. The public administrations of all member states must already accept the e-invoice formats contained in the standard. It can be assumed that the use of e-invoicing will become established throughout Europe in the future.

Challenges When Implementing Digital Invoices and How to Overcome Them

The introduction of new technologies usually requires training and a familiarization period. A new user interface, adjustments to accounting and unfamiliar input can be unfamiliar at first and may cause uncertainty or frustration. However, support services and training courses make the changeover easier and ensure a high level of acceptance among employees. And the more intuitive and clear the new software is, the easier it is for users to quickly become productive with it.

Another relevant topic when introducing the new invoicing system is data protection and compliance as well as the fulfillment of legal requirements (e.g. the multi-year retention obligation / documentation requirements in the event of an audit by the tax office). With the right software, digital invoice management is the most secure and legally best solution to fulfill these aspects.

Successful Transition With the Solution from free-com

We offer you an uncomplicated solution for digital invoice management. Incoming invoices are read and processed automatically. The processing time and effort are reduced enormously.

Our software accompanies the entire invoice process automatically and without time and personnel expenditure. Incoming invoices are digitized and fed into the system. The subsequent invoice approval is flexible and can be individually adapted to your company. Dedicated chat windows enable instant communication on the respective invoice. This allows incoming invoices to be managed, checked and approved – even mobile and from any location. Once approval has been granted, the posting is automatically fed into the ERP or FIBU system. The final step is audit-proof archiving in compliance with all legal documentation requirements. Companies that digitize their incoming invoices benefit from faster processing and less effort throughout the entire invoice process.

Our digital invoice processing is available both as a cloud solution and as an on-premise solution. Both systems are designed to be user-friendly, secure, fast and adaptable. They grow with your company’s requirements and tasks, from 10 to more than 10,000 invoices per day, anything is possible.

How to Successfully Implement Digital Invoice Management

Our step-by-step guide for a successful transition to digital invoice management: