How e-invoice works
An e-invoice is generated inside accounting or invoicing software using a standard data schema that defines exactly where the invoice number, line items, tax amounts and payment terms sit within the file. It is then transmitted directly to the buyer's system, often through a government or network clearinghouse rather than by ordinary email attachment. The receiving system reads the fields automatically, matching them against a purchase order or contract, which cuts keying errors and speeds up approval compared with a person retyping figures from a PDF.
Many countries now require or are phasing in e-invoicing for business-to-business or business-to-government sales, tying the format to real-time or near real-time tax reporting so the tax authority sees invoice data as it is issued rather than months later on a return. A business selling into one of these markets needs software that can produce the required schema and route it through the mandated network, since a plain PDF or scanned image will not satisfy the requirement even if every number on it is correct.
Example
A UK supplier ships parts to a French customer required to accept e-invoices under local rules. Instead of emailing a PDF for €4,200, the supplier's accounting software generates a UBL-format e-invoice and routes it through the Peppol network to the buyer's accounts payable system. That system reads the file automatically, matches it to a purchase order for €4,200, and posts it to the ledger without anyone retyping the line items, chasing a missing attachment, or waiting days for someone to open an email.
E-invoice in QuickBooks Online vs Xero
In QuickBooks Online, e-invoicing support depends on region and typically routes through connected apps or local tax-authority integrations rather than a single native feature covering every country a business might sell into. Xero supports e-invoicing through the Peppol network in several countries, letting users send and receive structured invoices directly between accounting systems without a manual PDF step in between the two parties.
Related terms
How LedgerBPO handles e-invoice
We set up e-invoicing workflows inside your existing software so invoices go out in the format each customer or tax authority requires, then track delivery and matching against purchase orders. This keeps billing accurate and compliant as more markets move toward mandatory digital invoice formats over the coming years.