Choosing an accounting software in Saudi Arabia is not limited to recording expenses, revenues, and preparing reports; rather, facilities need an integrated solution that connects sales, purchases, taxes, and electronic invoices, while complying with the requirements set by the Zakat, Tax and Customs Authority.

Facing these needs, business owners raise a set of questions: Can the software issue electronic invoices according to the required specifications? Does it handle VAT and returns? What needs to be prepared for when the business is included in the second phase of e-invoicing? Do invoice data transfer automatically to accounts and inventory, or do they require re-entering?

At Digital Works, we view the accounting software as a tool to manage interconnected operations, rather than just a means to issue invoices; the workflow begins with recording the commercial transaction and extends to updating balances, accounts, and reports.

Digital Works provides DigitalPro for Accounting and Point of Sale, which links e-invoicing with sales, purchases, inventory management, accounts, and reports in a single ecosystem.

What is meant by accounting systems approved by ZATCA?

The entity is currently known as the Zakat, Tax and Customs Authority (ZATCA). When searching for accounting systems approved by ZATCA, the intent is solutions that allow managing accounts and issuing electronic invoices in accordance with applicable requirements, along with executing the accounting operations needed by the facility.

It is necessary to distinguish between listing a service provider in the consultative list published by the Authority and the approval of all technical solutions provided by that provider. The list includes e-invoicing solution providers who have met qualification conditions, and the presence of a company's name in it does not mean the approval of all its products. A taxpayer can also use a non-listed provider, provided that the solution used complies with e-invoicing requirements.

Also discover: Accounting software for managing accounts and point of sale.

What should an integrated accounting system provide?

An integrated accounting software should cover the facility's daily operational needs, rather than just providing a separate interface for issuing invoices.

Among the key functions that should be verified:

• Creating and issuing electronic invoices.
• Handling Value Added Tax (VAT).
• Organizing sales and purchase operations.
• Managing customer and supplier data.
• Processing return operations.
• Issuing credit and debit notes.
• Tracking inventory and warehouses.
• Recording various payment methods.
• Managing general accounts.
• Defining user permissions.
• Preparing financial and tax reports.
• Providing integration and connectivity capabilities when requirements apply.

If you are in the stage of comparing available solutions, it is useful to review accounting and point of sale solutions, focusing on their coverage of your facility's actual needs.

How should the invoice work inside the accounting system?

Issuing the invoice represents the beginning of the processing cycle, not its final step.

Upon completing the sale, its data is expected to reflect on related elements according to the following sequence:

Sales Invoice → Customer → Tax → Inventory → Revenues → Payment Method → Reports

However, if the accountant needs to re-enter transaction data after issuing the invoice from another software, this indicates that the workflow still lacks the required integration.

Therefore, Digital Works is keen to link billing with accounts, inventory, and point of sale, so that data for a single transaction transfers to related units, reducing manual data entry repetition.

What are the e-invoicing requirements that should be verified?

The application of the first phase of e-invoicing in Saudi Arabia launched on December 4, 2021, and its requirements include issuing and saving invoices electronically using a solution compatible with the Authority's specifications.

When evaluating any accounting software, verify its ability to process the following elements:

• Tax invoices.
• Simplified tax invoices.
• Facility and customer data according to the invoice type.
• Tax value calculation.
• Return operations.
• Credit and debit notes.
• Saving invoices and retrieval capability.
• Providing required fields for each invoice type.

Tax invoices are typically used in transactions between businesses (B2B), while simplified tax invoices are mostly used when selling to the final consumer (B2C). The content of each type varies according to its specific data and requirements.

To get a clearer view of invoice management mechanisms, you can review electronic invoicing and accounting solutions.

What about the second phase of e-invoicing?

The second phase relates to integration and connectivity, and its implementation has gradually started from January 1, 2023, on groups of taxpayers.

In this phase, the facility's e-invoicing system is linked to the Fatoora platform, complying with specified invoice formats and technical requirements. The Authority notifies targeted taxpayers before the linking date by no less than six months.

When your facility becomes subject to integration and connectivity requirements, the ability to print the invoice alone is not enough; rather, you need an integrated accounting solution for managing accounts, reports, and billing, such as the solutions offered by Digital Works.

Among the essential questions to ask:

Can the software currently used connect to the Fatoora platform and execute the technical requirements required for the facility's activity?

You can book a consultation to discuss your facility's needs and learn about the appropriate solution for billing and accounting operations management.

How is VAT managed inside the system?

It is preferable that tax calculation does not rely on manual data entry in each invoice; instead, the software should allow configuring appropriate tax treatment and applying it to relevant operations.

The results of this processing should also link to accounting records and reports, helping to monitor tax data in an organized manner.

Operations that the system should cover include:

• Sales.
• Purchases.
• Discounts.
• Returns.
• Notices.
• Tax calculation.
• Displaying totals before and after tax addition.

These functions become increasingly important when a facility executes hundreds or thousands of invoices per month; a minor error in processing could lead to noticeable discrepancies when closing the financial period.

You can review accounting and invoice management solutions to learn how to link financial operations within a single ecosystem.

Why is an invoicing software alone not enough for some companies?

Facility needs vary depending on the nature of their activity and the volume of operations; a limited service activity may suffice with certain features, while stores and distribution companies need to manage a large number of products and operations.

The need for a broader system becomes more evident when the activity includes the following elements:

• Inventory management.
• Purchase operations.
• Dealing with suppliers.
• Point of sale operations.
• Managing multiple branches.
• Recording cash and credit sales.
• Processing returns.
• Distributing employee permissions according to tasks.

In these cases, separating billing from accounts and inventory leads to increased manual work, although it can be reduced by linking operations within a single system.

For facilities that need to organize daily sales operations, you can check point of sale and sales operations management solutions, and you can also learn about the procurement management system to organize the purchasing cycle.

Accordingly, it is best to choose software that matches the full workflow in the facility, rather than just verifying its ability to issue invoices.

What reports should the system provide?

The benefit of recording operations is not limited to keeping data, but this data must turn into clear information utilized by the business owner and accountant in monitoring performance.

Among the key reports that should be available:

• Sales reports.
• Purchase reports.
• VAT reports.
• Customer reports.
• Supplier reports.
• Inventory reports.
• Profit reports.
• Account reports.
• Financial statements.

If preparing these reports requires gathering data manually from multiple software, this means the level of integration among operations still needs improvement.

How do you test the system before using it?

Before transferring the facility's full data to the new software, it is best to test an actual workflow to ensure its suitability for daily needs.

Try executing the following steps:

1. Create a record for a new customer.
2. Add a supplier to the system.
3. Register a product or service.
4. Enter a purchase invoice.
5. Issue a sales invoice.
6. Apply a discount to the sales transaction.
7. Execute a return operation.
8. Verify tax calculation.
9. Review customer account balance.
10. Ensure inventory updates.
11. Create a sales report.
12. Extract an accounting report.
13. Verify another user's permissions.

This experience helps you determine software compatibility with the nature of the facility, and know whether employees will need additional files or applications to complete operations.

How does DigitalPro support this cycle?

DigitalPro from Digital Works provides an environment that combines a set of functions that facilities need in their daily business, most notably:

• Accounts management.
• Sales organization.
• Purchase tracking.
• Customer and supplier management.
• Inventory and warehouse tracking.
• Point of sale operation.
• Electronic invoicing.
• Report preparation.

The benefit lies in the interconnection of these functions, not just the availability of each function separately; data transfers between different operations within the same environment.

When issuing a sales invoice, the transaction links to sales, accounts, inventory, and customer data, instead of needing separate records in each department.

If your facility needs a cloud operating environment, you can book a consultation to learn about the appropriate cloud solution and discuss user and branch needs.

Would you like to test the software on operations similar to your facility's activity?
You can register and get a trial period to practically test invoices, sales, and accounts before making your decision.

When does your facility need an integrated accounting system?

The need to transition to an integrated system becomes apparent when the following operational problems recur:

• Being forced to re-enter invoice data into accounts.
• Discrepancy between inventory balance and sales movement.
• Difficulty tracking customer balances.
• Reliance on Excel to complete report preparation.
• Using independent software to manage inventory.
• Expansion in the number of branches.
• Difficulty organizing employee permissions.
• Delay in preparing financial reports.
• Data scattered across multiple sources without a unified reference.

When these challenges appear repeatedly, adopting an integrated accounting system becomes a means to organize operations and improve their interconnection, rather than merely replacing one software with another.

What is the difference between an accounting system and an e-invoicing software?

E-invoicing software focuses primarily on creating and managing invoices according to applied requirements.

As for an integrated accounting system, it links the invoice to the various operations that precede and follow it, according to the following sequence:

Purchases → Inventory → Sale → Invoice → Customer → Collection → Accounts → Reports

Therefore, when a facility needs to manage all these stages, using an integrated solution helps organize work better than distributing tasks across a set of separate software.

Errors recommended to avoid when choosing software

There are a set of practices that may increase daily operational complexity, most notably:

• Comparing software based on price alone.
• Focusing on invoice design without evaluating the full workflow.
• Failing to test return operations.
• Overlooking second phase requirements, connectivity, and integration.
• Failing to link sales to inventory movement.
• Separating billing from accounts without an actual need.
• Failing to verify user permissions.
• Neglecting updates and technical support services.
• Migrating all data before testing the software.
• Considering the presence of a QR code alone as sufficient evidence of solution suitability.

Accounting software should aim to reduce manual entry and unify data, rather than increasing the number of applications and steps needed by the facility to accomplish its work.

Frequently Asked Questions about Accounting Systems Approved by ZATCA

What are the accounting systems approved by ZATCA?

They are solutions facilities look for to organize accounts and manage electronic invoicing in compliance with the requirements of the Zakat, Tax and Customs Authority. The suitability of each solution must be determined based on the requirements applied to the facility and the accounting functions it needs.

How do I verify software compatibility with e-invoicing?

Verify the ability to issue required invoice types, process taxes, returns, notices, and save data, alongside supporting connectivity and integration if the facility is subject to second phase requirements.

Is the presence of a QR code enough to ensure software suitability?

No, the QR code represents one of the requirement elements in applicable cases, and does not replace compliance with the rest of the specifications for issuing and saving invoices or connectivity and integration phase requirements.

Is it necessary to link the system to inventory?

When a facility sells products, linking sales to inventory helps update quantities and track cost of sales and related reports, instead of recording inventory movements manually.

Does the second phase apply to all companies at the same time?

No, the integration and connectivity phase is applied gradually to groups of taxpayers, and the Authority notifies targeted facilities at least six months before the specified linking date.

Does DigitalPro combine billing and accounts?

DigitalPro combines electronic invoicing, accounts, sales, purchases, point of sale, inventory, customer and supplier management, and reporting functions, making it a viable option for facilities needing to manage these operations within an interconnected ecosystem.

Conclusion

When choosing accounting systems approved by ZATCA, the appearance of the invoice should not be the only criterion, but rather the full workflow within the facility and how interconnected its operations are.

Start by asking the following question:

What happens after issuing the invoice?

Is the customer balance updated? Do inventory quantities change? Are revenues and taxes recorded? Do transaction details appear in reports without needing re-entry?

If these operations are interconnected and their data updates automatically, the facility benefits from an accounting ecosystem that goes beyond merely issuing invoices to managing operations comprehensively.

Therefore, Digital Works offers DigitalPro for Accounts and Point of Sale, which combines accounts, sales, purchases, inventory, billing, and reporting functions within a single environment.

You can book your consultation to learn about available solutions and discuss your facility's needs, then register and get a trial period to test the software using actual operations including invoices, customers, suppliers, inventory, and reports, before making your transition decision.