Why you should not use ZUGFeRD and why it is risky?
Digitisation has many advantages, especially in the area of invoicing. Two important formats have become established in Germany: ZUGFeRD and XRechnung. While both systems have their justification, there are specific reasons why the use of ZUGFeRD can be more risky for companies than XRechnung. The risks and weaknesses of ZUGFeRD and the advantages of XRechnung are explained in detail below.
The Risks of Using ZUGFeRD
Email delivery risks: ZUGFeRD invoices are often attached to emails as PDF files and sent. This harbours a considerable risk of phishing attacks. Cyber criminals can send fraudulent emails that look legitimate and tempt recipients to open malicious attachments or click on dangerous links. Especially at a time when email-based attacks are on the rise, the distribution of invoices via email can be a major gateway for cyberattacks.
Less secure transmission: Unlike XRechnung, which is transmitted via the secure Peppol network, ZUGFeRD invoices are often sent via insecure email channels. This type of transmission is more susceptible to interception, spoofing or manipulation. Without additional security measures, companies run the risk of falling victim to fraud or data leaks. Smaller companies or self-employed people in particular, who do not have extensive IT security measures in place, are exposed to a higher risk.
Trust issues: Emails are a frequently used medium for cyber attacks. Companies that rely on ZUGFeRD must implement additional verification and security protocols to ensure that invoices are genuine and have not been tampered with. This not only leads to increased security costs, but also to an additional administrative burden.
Insufficient encryption and validation: ZUGFeRD invoices are often sent without encryption and validation unless organisations implement their own security measures. This increases the risk of the data being compromised during transmission. The lack of standardisation for invoice security makes it easier for attackers to find and exploit vulnerabilities.
Why XRechnung is More Secure
In comparison, XRechnung combined with the Peppol network offers a much more secure solution. Here are the main advantages of XRechnung and why it is a superior choice for businesses:
Secure Peppol network: XRechnung is usually sent via the Peppol network, which is based on a secure, standardised process. The Peppol network provides end-to-end encryption, validation and ensures that invoices are only sent to the intended recipients. This significantly minimises the risk of phishing attacks, data interception or manipulation.
Validated transmissions: Every XRechnung sent via Peppol goes through a validation process that ensures the invoice is formatted correctly and contains the necessary information. This prevents errors and reduces the likelihood of incomplete or incorrect invoices being sent.
Automated and efficient processing: The XML-based structure of XRechnung enables automated processing and integration into ERP systems. This not only saves time, but also ensures that invoices can be processed faster and without errors. This is a significant advantage for large companies, as manual processes are reduced and errors are avoided.
EU-wide compatibility: XRechnung is compatible with EU regulations for electronic invoicing. Peppol enables companies to send invoices securely and across borders within Europe. This is particularly important for companies that operate internationally, as they need a solution that works both locally and globally.
Protecting small businesses and freelancers: While large companies have comprehensive security systems in place, small businesses and freelancers are often inadequately protected. By using XRechnung and Peppol, smaller companies can also benefit from the high level of security without having to invest in expensive IT security solutions. This makes XRechnung a particularly attractive option for smaller players in the market.
ZUGFeRD vs. XRechnung: A Summary
While ZUGFeRD was originally developed as a hybrid format to offer companies a flexible solution, the current threat situation and increasing security requirements have revealed significant weaknesses. The distribution of invoices by email opens the door to cyber criminals and presents companies with a variety of security problems.
In contrast, XRechnung in conjunction with the Peppol network offers a comprehensive solution that is not only more secure, but also more efficient and future-proof. Companies that process government contracts or operate internationally have a decisive advantage with XRechnung.
It is therefore advisable to switch to XRechnung in the long term, not only to fulfil the security requirements, but also to increase the efficiency and reliability of your own invoicing processes. For freelancers, small companies and large corporations alike, XRechnung offers a secure, automated and future-proof solution for electronic invoicing.
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