Digital Invoicing and Billing in China – Why Companies Should Start the Transition Now 

 China’s shift to digital invoicing is expanding rapidly, with e-invoices now mandatory for rail and air travel and rolling out across provinces and cities. This article outlines why China digital invoicing matters, key compliance considerations for businesses, and tips for a smooth transition. 

China is steadily shifting from paper to digital invoicing, with fully digitised e-invoices rolled out nationwide since December 2024, and mandatory adoption is beginning to be rolled out to sectors like rail and air travel, as well as individual provinces and cities. While digital invoicing is not yet mandatory nationwide, it is clear that China is seeking to phase out paper invoices long-term. Companies should therefore consider early adoption in order to stay ahead of compliance requirements and take advantage of the enhanced efficiency it provides. 

China’s billing and invoicing digitisation trend 

Since the nationwide rollout of fully digitised e-invoices (e-invoices) in late 2024, mandatory adoption has been gradually rolling out to more and more sectors and provinces.  

China Railway and all of China’s domestic civil airlines ceased providing paper invoices for passenger air and railway tickets from 1 October 2025 onward, meaning that the majority of travel reimbursements and input VAT credit claims related to travel purchases must now be handled digitally. 

On a regional level, tax authorities in Zhejiang province ceased printing provincial-level invoices on 30 April 2026, and required all taxpayers to stop issuing provincial-level invoices from 30 Jun 2026, replacing them with digital invoices.1 Meanwhile, from 1 July 2026 onward, the city of Dalian replaced all paper invoices issued by municipal tax authorities with digital invoices, except for local taxi invoices or invoices for local partial journey tickets on urban public transport.

Alongside the digitisation of invoicing, China has been pushing for the digitisation of accounting and bookkeeping systems. In May 2025, China issued the Notice on Promoting the Application of Accounting Data Standards for Electronic Vouchers, officially rolling out the system nationwide following successful pilot implementation. The standards aim to solve issues with the receipt, reimbursement, and bookkeeping of various electronic vouchers, while encouraging companies to digitise accounting systems.  

Over the past few years, the Ministry of Finance (MOF) has issued several sets of guiding standards for electronic vouchers, while the State Administration for Market Regulation has issued several sets of recommended national standards for entering electronic vouchers into accounts, providing businesses with additional guidance on digitising their accounts and invoicing processes. 

While the scope of mandatory adoption of digital invoices is still relatively narrow, with nationally administered invoices unaffected in all areas except rail and air travel, and digital accounting standards being implemented on a recommended basis, the developments signal a gradual phasing out of paper invoices. Businesses will be increasingly encouraged to adopt digital invoicing and billing, and further cessations of paper invoices are expected in more cities, provinces, and sectors. Companies that do not adapt in time risk falling behind on compliance, losing efficiency gains, and facing a harder and more disruptive transition in the future. 

Key considerations for businesses 

To stay ahead of the regulatory environment, businesses are advised to begin transitioning to a fully digitalised e-invoicing system now, ahead of it becoming mandatory in their region or sector. Doing this has a wide range of benefits beyond the potential for mandatory implementation in the future. Digitising billing and invoicing can help to streamline reconciliation, reimbursement, and bookkeeping, as e-invoices can be received, verified, and entered directly into accounting systems without manual data entry. This can significantly cut the processing time and error rate of manually matching paper receipts with expense claims. 

At the same time, the transition can lead to disruption where a company’s existing accounting software, ERP, or reimbursement systems aren’t yet fully compatible with the new e-invoice formats. This may thus require system upgrades, staff retraining, and new processes for retrieving, verifying, and archiving e-invoices. 

Companies should therefore be aware of the following issues when launching a digital accounting system:

• Contracting compliant accounting software. The Notice on Promoting the Application of Accounting Data Standards for Electronic Vouchers provides for nationwide implementation of the standards and reiterates that accounting software, whether developed in-house or supplied by third-party vendors, should be upgraded within three years of the standards taking effect. Given the 1 January 2025 implementation date, businesses should expect software to be compliant by 1 January 2028. Companies must therefore confirm with their software vendor whether the service already aligns with standards or there is an upgrade pathway in place. Companies implementing or upgrading accounting systems after this date should ensure that the software is capable of supporting the electronic voucher accounting data standards.
• Ensuring valid e-invoices for input VAT deduction. Digital invoices must be cleared by the STA, which means they must be in the correct format (XML) and meet other requirements. If a company wants to use e-invoices for the input VAT deduction, they must also confirm this intended use through their digital tax account. Invoices that are incorrectly formatted can lead to voided invoices and thus jeopardise a buyer’s right to deduct input VAT. Companies therefore need a reliable process for issuing, verifying, and receiving e-invoices to avoid higher tax payments.
• Guarding against fraudulent e-invoices. Digitisation has not eliminated the risk of fraudulent invoices, with several cases having ended up in courts since the e-invoicing pilot programs. Companies must be vigilant to this possibility as the use of fraudulent invoices can expose companies and responsible personnel to significant administrative penalties and, in serious cases, criminal liability, even where the underlying transaction was genuine.
• Low-value transactions are also affected. Small and local vendor receipts, such as for meal expenses and taxis, issued under provincially administered formats are also being phased into the digital system. This means reimbursement processes will also need to account for digitalisation at the employee level, not just at the AP and vendor level.
• Continued use of paper invoices for certain transactions. While e-invoice adoption is expanding, outside of provinces and sectors where digital formats have become mandatory, many smaller vendors are still likely to only issue paper invoices. This means companies will still need to maintain a system in place for processing paper invoices until e-invoices are adopted universally, which may still be many years away. 

Tips for successful implementation 

The right approach for successful implementation will largely depend on company size and the maturity of its existing IT systems. Large companies with established reimbursement, accounting, and archiving systems are better positioned to integrate directly, while smaller businesses may wish to outsource invoicing for smoother implementation. 

For large and more digitally mature businesses, the priority should be integrating directly with the national platform or API and connecting billing systems to the STA’s e-invoicing platform or the Leqi platform. This will ensure that invoices are issued, verified, and posted automatically. This can be done using either the MOF’s free toolkit or self-developed tools to adapt existing systems to the data standard.

Smaller businesses without the same IT infrastructure or invoice volume aren’t expected to build this capability in-house. The MOF’s own guidance explicitly permits small and micro-enterprises to outsource one or more stages of their e-voucher processing to compliant third-party service platforms, or to bookkeeping agencies that already meet the required data standards. 

Regardless of company size, the first step for a business to adopt digital billing and invoicing is to audit its current billing and ERP systems against the new e-invoice data requirements. This involves checking whether existing setups can generate and read the structured fields (unique invoice numbers, dynamic QR codes, digital signatures, and so on), or whether outsourcing may be the more realistic option. 

Companies should also ensure that the relevant staff are capable of using the new system. Specifically, finance and accounting teams need to know how to retrieve, verify, and process e-invoices, including e-invoices from smaller vendors.

Finally, for companies operating across multiple jurisdictions in China, it is also important to track local requirements for e-invoicing, as some regions and cities have begun to mandate adoption.  

How Dezan Shira & Associates can help 

As China’s invoicing and accounting systems continue to digitise, businesses need up-to-date expense and reimbursement processes. Dezan Shira & Associates‘ digital expense management solution helps companies capture, verify, and process e-invoices in real time, reducing manual entry, minimising compliance risk, and keeping finance teams ahead of China’s shifting invoicing requirements. Get in touch to learn how we can help streamline your expense reporting and reimbursement processes.