Protect your business from fraud with secure e-invoices. In this first of a two-part series, we explain the key security aspects of e-invoicing, from authenticity and integrity to the risks of insecure transmission channels such as email.
The electronic invoice, also known as e-invoicing, is now much more than just a digital version of the paper invoice. It is a structured data format that automates processes and increases efficiency. With the increasing digitization of financial transactions, the security, authenticity and integrity of invoice data are becoming more and more important.
In fact, the acceptance of e-invoicing is growing rapidly in Europe and worldwide. This is largely driven by increased regulatory requirements from governments and the drive to increase efficiency. The growing importance is also reflected in the market development. According to e-invoicing pioneer and market expert Billentis, the market value for e-invoicing solutions amounted to EUR 8.3 billion in 2024 and is expected to rise to around EUR 22.2 billion by 2028, which corresponds to an average annual growth rate of 27.9%. These figures underline the dynamic growth of the e-invoicing market.
Secure e-billing is crucial for companies to protect themselves against fraud and ensure the validity of their business transactions.
The three pillars of secure e-invoices
To ensure robust security, the electronic invoice is based on three fundamental pillars:
- Authenticity: A secure e-invoice must clearly define who the actual issuer and recipient of the invoice is. This helps to prevent the circulation of forged invoices and protects against unauthorized third parties posing as business partners. Technologies such as digital signatures and qualified electronic seals (more on this in our next article) are crucial for confirming the identity of the sender. In addition, authenticity can be ensured by internal control procedures that establish a reliable audit trail between the service provided and the invoice.
- Integrity: The integrity of an e-bill ensures that the data remains unchanged during transmission and storage. Manipulation, whether due to technical errors or malicious attacks, should either be ruled out or at least be detectable. Digital signatures and tamper-proof transmission channels are of central importance here. Integrity can also be guaranteed by internal control procedures.
- Legibility: Every e-invoice must be legible for humans. This means that the mandatory VAT information must be clearly displayed. Suitable display programs or viewers must be used to display electronic invoices correctly. In the case of structured formats, a clear assignment of the data to the respective attributes must be guaranteed. Legibility must be ensured over the entire retention period.
In addition to these three aspects, two other factors are of decisive importance for the security and reliability of e-invoices:
- Non-repudiation: This means that an action or transaction cannot be subsequently disputed by any of the parties involved. In the context of the e-bill, this means that the sender cannot deny having sent the invoice and the recipient cannot deny having received the invoice. The content of the invoice may also not be subsequently changed without being noticed.
- Confidentiality: The confidentiality of invoice data is often business-critical, even if it is not always decisive for the validity of the invoice. Secure transmission channels ensure that sensitive financial information does not fall into the hands of unauthorized persons.
E-mail: A risk for e-invoices
The transmission of e-invoices by e-mail poses considerable security risks. For example, emails can easily be intercepted, manipulated or forged. Attachments can contain malware and the authenticity of the sender is often difficult to verify. Reliance on email as the primary transmission method for e-invoices can therefore be a potential entry point for fraudsters and lead to significant financial losses.
Common tactics of email invoice fraud are:
- Fake invoices: Fraudsters hack into a company's e-mail address and send customers fake invoices with payment to an account belonging to the fraudsters.
- Altered invoices: Fraudsters intercept an invoice and change the bank details on the invoice to their own details, often to their own bank details in a distant foreign country.
- Redirection: Fraudsters send an email from the company's email address asking the customer to pay to another bank account due to an alleged administrative error.
Fraudulent invoices and emails are often sent from a company's official email address. This makes it particularly difficult for recipients to recognize the fraud. In addition, some fraudsters set up automatic forwarding rules in the company's email accounts to cover their tracks. If a customer replies to the email and questions the invoice, the fraudster can reply without the company knowing. Fraudsters can also set up filtering rules to delete all emails they send. This way, their fraudulent messages and invoices cannot be detected as easily.
The expert association of the German e-invoicing industry, the Verband elektronische Rechnung (VeR), also emphatically points out these risks. The problem is highlighted, among other things, by a ruling of the Higher Regional Court of Schleswig-Holstein dated 18.12.2024 (Ref.: 12 U 9/24), which emphasizes the security risks of emails for sending invoices. The court came to the conclusion that email is not an optimal means of transport for invoice documents, particularly with regard to security and susceptibility to manipulation. In the specific case, an invoice was manipulated by replacing the company's bank details with those of a third-party bank. The court emphasized that companies should not send invoices by email without sufficient protective measures such as end-to-end encryption, as this represents a foreseeable risk for customers.
Case study: Fraud with traditional invoice dispatch methods
A sensational fraud case from September 2024 underlines the importance of secure processes when dealing with electronic invoices. The Munich Regional Court sentenced three defendants to suspended prison sentences for commercial and gang fraud. The perpetrators had obtained around 200,000 euros between November 2020 and April 2021 by sending misleading invoices to customers of the European Intellectual Property Office (EUIPO). They operated under the name "IP Register UG" and deliberately imitated official EUIPO letters to create a sense of urgency. The court's decision is considered an important precedent in the fight against fraudulent requests for payment in the IP environment and has a signal effect for further proceedings within the EU.
Such cases of fraud would have been much more difficult to implement if genuine electronic invoices had been used. This is because by using structured e-invoices in a standardized format and, above all, sending them via a secure infrastructure - such as a certified e-invoicing network or an accredited service provider - both the authenticity and origin of invoices can be clearly traced. Manipulation and deception, as in the case described above, would thus be detected at an early stage or prevented completely.
The importance of secure e-invoices in the fight against fraud
Even apart from spectacular court cases, it is clear that invoice fraud is a widespread problem in digital business transactions. According to recent surveys, over 90% of German online retailers have already been confronted with attempted fraud. Manipulated invoices sent via compromised email accounts are particularly common. These attacks clearly show how vulnerable conventional communication and invoicing channels are to abuse.
In contrast, structured e-invoices that are transmitted via certified networks or accredited service providers offer significantly greater protection. They enable clear verification of the sender and content, which means that fraudulent activities can be detected at an early stage or even prevented completely. In the second part of our blog series, in which we take a detailed look at secure e-invoicing solutions, we will explain what these secure networks and service providers look like in concrete terms, what advantages they offer in detail and how you can select the right solution for your company.
To protect the integrity and authenticity of financial transactions, companies should avoid insecure methods such as mail, where invoices can be lost, or email, which is vulnerable to interception and tampering. Instead, they should use secure networks and protocols.
The e-invoice offers a secure and standardized alternative here. At its core, it differs fundamentally from sending a PDF file by email. An e-invoice is transmitted directly and in a structured manner from the sender's accounting software to the recipient's accounting software via a secure network.
Secure e-invoices are therefore more than just a technical feature - they are a crucial protective shield for your company. But what do secure e-invoicing solutions actually look like and what benefits do they offer? In the second part of this blog series, we take a closer look at secure e-invoicing solutions and their benefits. Stay tuned to find out how you can best protect your company!
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