EN 16931 is a European regulation which outlines the mandate and standards for electronic invoicing. Compliance to EN 16931 requires adherence to structured data syntaxes, the inclusion of mandatory data fields and automated validation.
For many organisations, compliance to EN 16931 is mandatory – but verifying the bank details on the invoices are not. This leaves businesses exposed to payment fraud and supplier impersonation scams. We therefore recommend pairing your e-invoicing standards with bank account validation and monitoring with software from Trustpair.
What is EN 16931?
EN 16931 is the EU’s standard for electronic invoicing. It covers features like format, necessary information, and the secure sending and receiving of e-invoices in a compliant manner.
It was introduced to standardise the electronic invoice process in the public sector across member states, promoting interoperability with machine-readable invoices to increase efficiency and reduce costs. EN 16931 also helps organisations in different member states to remain transparent with tax authorities, and increase resilience against payment threats.
EN 16931 was developed under Directive 2014/55/EU, which is the legislation mandating all public sector organisations to be able to receive, process and archive e-invoices (B2G). Now though, in some countries such as Germany, the mandate has been extended to B2B invoices.
The main feature of electronic invoices is the core semantic model, which refers to the machine-readable code within the invoice. Typically, this is XML code, and users may choose to send invoices with only machine-readable information, or choose a hybrid format which still includes this data, but looks closer to a PDF.
What are the key EN 16931 requirements?
The key EN 16931 e-invoice requirements are as follows:
| Requirement | Details |
| Structured invoice format | In a machine-readable format, specifically supporting Universal Business Language. |
| Mandatory data fields (semantics) | Elements to include: the unique invoice number, VAT number, seller and buyer information, payment terms and total amounts. |
| Syntax bindings | Defines how the business terms in the semantic model are represented in the XML structure. In this case, receiving parties must accept invoices in at least two, and often three, specific XML syntaxes. |
| Validation rules | Invoices must pass Schematron, which is the ISO-standard rule-based validation of XML. |
| Interoperability | Regardless of the ERP system, the standard ensures that any receiver can process invoices from any sender. |
While the e-invoice has been mandatory in business-to-government transactions since 2019, those sending and receiving B2B payments may also want to pay attention, because the EU-wide mandate in this area will be in force from 2030 onwards. This will also align with the new VAT in the Digital Age (ViDA) regulation in the UK, increasing transparency and efficiency in the tax world.
What are the benefits of EN 16931 compliance?
EN 16931 compliance can be highly-beneficial to organisations, because of:
- Interoperability
- Cross-border trade opportunities
- Automation
- Faster and cheaper processing
<H3> Interoperability <H3>
Allowing complex data systems to securely exchange data without manual intervention has significant efficiency and cost-saving benefits. This hits even harder when you find out that 77% of CEOs and COOs dedicate their own time each month to dealing with invoice processing and payment issues such as chasing overdue invoices, with 4 in 10 having to intervene every week.
<H3> Cross-border trade opportunities <H3>
By adhering to the international standard, organisations gain instant credibility within the RFP process. It’s a competitive advantage in the bid to become a government supplier.
<H3> Automation <H3>
EN 16931 replaces paper or PDF-based invoices, which are typically processed either manually or with limited finance automation through optical character recognition. Instead, e-invoices can be processed and validated without any human intervention. This frees up finance teams and executives to focus on higher-value tasks, such as the month close process, delivering better business value.
<H3> Faster and cheaper processing <H3>
It’s estimated that e-invoices cost between €3-6 to process, compared to paper and PDFs, at approximately €9 per invoice. With faster processing times too, companies can work to manage their transactions to maintain supplier relationships while optimising cash flow.
<H2> What challenges do businesses face? <H2>
Although there are many benefits to EN 16931, compliance can also bring challenges.
<H3> ERP integration <H3>
During the transition phase, providing a smooth integration with existing ERP systems and legacy tech is a big challenge. Not only do businesses have concerns over operational disruptions (the very factor that this regulation aims to solve), but each third party added into the supply chain increases risks to cybersecurity.
ERP integrations can be very complex, and small businesses, or those with limited IT capacity are those likely to struggle the most. Moreover, although the technical standards of EN 16931 are clear, short lead times could result in non-compliance.
Fortunately, many member states recommend particular softwares to help. For example, in Germany, XRechnung and ZUGFeRD are two types of ‘approved’ e-invoicing softwares for organisations to use, depending on whether they work with government or other businesses.
<H3> Data mapping <H3>
Another key challenge for EN 16931 is in the data mapping, because a generic mapping system will simply not suffice. Because the legislation is built to promote interoperability, there’s every chance that organisations will be dealing with multiple invoices across different tax jurisdictions. This adds significant complexity.
Solving this challenge requires a reliance on automation, streamlining the data mapping across different invoice fields and structured data formats.
<H3> Multi-country mandates <H3>
Although the aim of EN 16931 was to harmonise e-invoicing across the EU, member states still wanted to meet their local implementation standards. This causes fragmentation challenges for organisations operating across more than one jurisdiction.
In particular, varying timelines and scopes create challenges for compliance and implementation teams. For example, countries like Belgium favour e-invoice validation through the Peppol network. But Italian organisations must pass their e-invoices through a government portal for real-time clearance.
Teams working across multiple jurisdictions must manage these differences carefully.
<H3> Risk of automation without controls <H3>
EN 16931 introduced the widespread automation of many invoicing processes, saving both time and costs. But without verification and internal controls, many of these processes carry the same level of risk.
For example, if the system ingests incorrect data, it can cause an error that creates a knock-on effect throughout the entire chain of autonomous AI agents. This is how hallucinations typically occur in LLMs: one agent makes a decision based on the outcome of another, and when the outcome is erroneous, the next action gets further from the correct outcome.
In the case of e-invoicing, it could mean duplicating invoices and paying twice, or not paying at all! Either scenario is a disaster for your vendor relationships. The risk of fraud is also still present, because while EN 16931 ensures your invoices are structured compliantly, it doesn’t require that users verify the payment details themselves.
Therefore, teams must introduce controls at every stage of the process in order to have true oversight over the entire e-invoicing process. In the case of fraud prevention in the e-invoicing environment, companies can complement their compliance with independent bank account validation and continuous vendor data monitoring, such as Trustpair.
<H2> How to become EN 16931 compliant? <H2>
Becoming EN 16931 compliant requires a deliberate strategy. Here are some of the steps you may need to take to prime your business for the regulation:
- Gap analysis: Conduct a comprehensive audit of current invoicing workflows to identify the technical discrepancies or data improvements you need to make to become EN 16931 compliant.
- Assessing compliant formats: Evaluate which of the approved softwares and syntaxes best fit with your current systems, and can integrate with your ERP systems.
- Implementing validation: the rules require every single invoice to be automatically validated against the rules of EN 16931 to prevent technical errors and non-compliance penalties.
- Monitoring ongoing compliance: the rules are evolving, and in 2030, they will expand again. This means staying on top of your compliance with continuous monitoring, and iterating when you need to.
<H2> Recapping EN 16931 compliance <H2>
EN 16931 compliance helps EU organisations to adhere to electronic invoicing standards. It requires structured invoice formats and automatic validation, and provides interoperability, efficiency and automation. Outside of these requirements, companies must still introduce independent controls like payment validation to secure e-invoices against fraud.