Digital pro: An accounting software compliant with Zakat, Tax and Customs Authority (ZATCA) requirements
Digital pro: An accounting software compliant with Zakat, Tax and Customs Authority (ZATCA) requirements
Choosing an accounting software compliant with ZATCA requirements is not limited to issuing an invoice containing a QR code, but depends on the software's ability to create electronic invoices and notices, save and share them in the required format, in addition to linking all invoicing units to the Fatoora platform when the facility is subject to Phase Two requirements.
In this article, we explain the concept of accounting software compliant with ZATCA, the integration requirements with ZATCA in Phase Two, how to verify the solution provider, and the most prominent features that should be tested before subscribing, in addition to the role of DigitalPro in linking electronic invoicing with accounts, sales, inventory, and point of sale.
What is the Zakat, Tax and Customs Authority (ZATCA)?
The Zakat, Tax and Customs Authority (ZATCA) is the government entity in the Kingdom of Saudi Arabia responsible for managing zakat, tax, and customs activities according to the applicable laws and regulations. It also works to assist taxpayers in complying with their duties and following up on the implementation of zakat, tax, and customs requirements.
The Authority was established in its current form after merging the General Authority of Zakat and Tax and the General Customs Authority under the name Zakat, Tax and Customs Authority. Its vision is to protect the nation, manage zakat, taxes, and customs, and facilitate trade efficiently while placing the beneficiary at the forefront of its attention.
Regarding electronic invoicing, the Authority manages the "Fatoora" system, which transitions the process of issuing invoices, credit, and debit notes from paper documents or manual procedures into structured electronic data that can be issued, saved, processed, and shared according to approved controls and requirements.
Therefore, the search for the best accounting system compliant with ZATCA should start with understanding the Authority's requirements, not just comparing the invoice layout or subscription cost.
Zakat and Tax Authority Tasks
ZATCA's responsibilities include collecting zakat, taxes, and customs duties, assisting taxpayers in fulfilling their obligations, monitoring the level of compliance, as well as raising awareness of the systems, instructions, and regulations related to its jurisdictions.
Among the most prominent tasks performed by the Authority:
- Collecting zakat, taxes, and customs duties according to approved regulations.
- Providing services and guidance that help taxpayers comply with requirements.
- Following up with taxpayers and ensuring the fulfillment of statutory obligations and dues.
- Supporting and enhancing voluntary compliance with zakat, tax, and customs duties.
- Raising awareness of relevant regulations, instructions, and decisions.
- Managing registration, returns, and audits for Value Added Tax (VAT).
- Conducting field visits and regulatory work.
- Supervising the electronic invoicing system.
- Applying fines and statutory procedures in cases of non-compliance.
- Cooperating with local and international entities within the Authority's jurisdiction.
The Authority does not choose the accounting software used by the facility, but rather determines the technical and regulatory requirements that the used solution must adhere to. The facility remains responsible for the accuracy of its data, linking all invoicing devices, issuing documents within the specified periods, and saving and sharing them correctly.
Meaning of ZATCA-Approved Accounting Software
The term "ZATCA-approved accounting software" is used commercially to refer to an accounting software or e-invoicing solution that supports the e-invoicing requirements issued by ZATCA, and can be configured to issue and save invoices and link them to the Fatoora platform.
Here is a fundamental point to note: The accounting software should comply with the electronic invoicing requirements, which is available at Aamal Raqmia (Digital Business) as it is approved within the list of electronic invoicing service providers.
Therefore, you must differentiate between the following three terms:
| Term | Practical Meaning |
|---|---|
| ZATCA-Compliant Software | A solution that supports the technical and regulatory requirements applicable to the facility. |
| Provider listed in the indicative list | A solution provider that has met the qualification conditions for inclusion in the list. |
| Approved Software | A description used for accounting software, but it does not absolve the facility of responsibility for verification and compliance. |
The solution providers list page on the Authority's website clarifies that the list is indicative and non-binding, and does not represent an endorsement by the Authority of the technical solutions provided by the listed providers.
Accordingly, the evaluation of any software should answer the following questions:
- Does it support the phase that applies to my facility?
- Can it issue the types of invoices I need?
- Does it support XML and required technical fields?
- Can it link all cashier devices and branches?
- Does it execute clearance and reporting depending on the invoice type?
- Does it retain invoices and their associated operations log?
- Does it prevent deleting or modifying the invoice after issuance?
- Does it manage credit and debit notes correctly?
- Does it receive necessary updates when Authority requirements change?
The Importance of Choosing a ZATCA-Approved Accounting Software
The importance of choosing a ZATCA-compliant software lies in protecting the billing cycle from errors, linking sales to accounts and taxes, and reducing the possibility of issuing documents that do not meet the requirements or failing to share invoices within the specified time.
The right solution helps the facility to:
- Issue electronic invoices including required fields.
- Calculate Value Added Tax accurately.
- Distinguish between a standard tax invoice and a simplified invoice.
- Generate a sequence number and invoice identifiers.
- Create a QR code according to requirements.
- Save invoice data and associated notices.
- Prevent illegal modifications to invoices after issuance.
- Link invoices to sales, inventory, and customer movements.
- Setup and configure invoicing units.
- Send invoices or report them through the Fatoora platform.
- Track accepted and rejected invoices and related alerts.
- Provide reports that help the accountant in auditing work.
An integrated system also contributes to reducing discrepancies between POS software data and accounting data, so that the sales process can reflect on the invoice, customer account, inventory, tax, and reports through an interconnected procedure.
The penalty for not integrating with ZATCA should not be seen as a fixed amount. The violations classification published by the Authority shows that the first instance of failing to link all invoicing systems and devices is a warning. Then the fine starts upon repeating the violation at 10,000 riyals, increasing to 15,000, then 20,000, then 30,000, then 40,000 riyals, and may reach 50,000 riyals when repeating the violation after the sixth time.
You should always refer to the official applicable classification and verify the actual violation status before determining the value of any financial obligation.
The official example also illustrates that linking only two out of three cashier devices does not achieve compliance with linking all billing issuance devices and systems, even if the other devices are linked correctly.
Basic Requirements of Phase Two of Electronic Invoicing and Its Impact on Companies
Phase two represents the integration and connection phase, in which the facility's electronic invoicing system must be linked to the Fatoora platform, and invoices must be issued in a structured electronic format containing the required fields and security elements.
The implementation of phase two began gradually starting January 1, 2023, and the Authority determines the groups covered by the application according to its criteria, notifying targeted facilities at least six months before the integration date.
Among the most important requirements of phase two:
- Linking the electronic invoicing solution to the Fatoora platform.
- Configuring all invoicing units and devices.
- Generating XML files according to approved specifications.
- Supporting PDF/A-3 format which includes the XML file when used.
- Generating a Universally Unique Identifier (UUID).
- Applying a sequential counter for invoices.
- Linking the previous invoice to the current invoice using a cryptographic hash function.
- Applying the cryptographic stamp and required security elements.
- Generating a QR Code with the required extended data.
- Clearing standard tax invoices before sharing them.
- Reporting simplified invoices within the specified period.
- Saving response statuses issued by the platform.
- Handling error states, warnings, and rejections.
- Issuing credit and debit notes electronically.
- Preventing functions that manipulate data, delete it, or reset the sequence.
The impact of phase two on facilities varies depending on the nature of their operational structure; an establishment relying on a single cashier device has different needs than a restaurant chain or stores that own a large number of branches and devices. Therefore, it is important to inventory all invoicing points before starting the integration process.
The integration process with ZATCA practically takes place through the following phases:
- Receiving the targeting notification from the Authority.
- Examining the readiness of the used invoicing software.
- Updating facility and branch information.
- Identifying and inventorying all invoice issuance units.
- Creating a one-time password (OTP) from the Fatoora platform.
- Configuring each device or issuance unit.
- Testing compliance and sending test invoices.
- Obtaining production environment credentials.
- Starting the clearance of standard invoices and reporting simplified invoices.
- Monitoring acceptance, rejection, and error statuses.
The impact of integration also extends to employee procedures, where the cashier, accountant, and system administrator should be trained to deal with returns, cancellations, notices, and error cases, rather than modifying or deleting the original invoice.
Conditions That Must Be Met in Approved Accounting Software in Saudi Arabia
The appropriate accounting software should combine compliance with technical requirements with the accounting and operational functions the facility needs. Supporting e-invoicing alone does not make the software suitable for managing accounts, inventory, and branches.
Among the most prominent conditions that must be ensured:
Support for Tax Invoice and Simplified Invoice
The software must differentiate between the tax invoice, which is often used in B2B transactions, and the simplified tax invoice, which is mostly used in direct sales to individuals.
Value Added Tax (VAT) Support
The software should provide the ability to:
- Set up tax rates and categories.
- Calculate tax at the item and invoice level.
- Handle discounts.
- Show totals correctly.
- Process exempt or zero-rated supplies when applicable.
- Prepare tax reports.
- Issue credit and debit notes.
Support Phase Two Requirements
The system must be capable of supporting XML files, UUID, cryptographic stamp, and QR Code, in addition to clearing standard invoices and reporting simplified invoices.
Link All Issuance Units
The software should allow registering and configuring all cashier devices, branches, servers, and units that issue invoices according to the technical infrastructure used within the facility.
Tamper Prevention
The software must not allow deleting invoices after issuance, directly modifying their data, resetting the invoice counter, or changing the sequence in a way that affects the integrity of the records.
Credit and Debit Notes Management
When a return occurs or an error is discovered, the original invoice is not modified; instead, a credit or debit note linked to the invoice is created with clarification of the reason for the adjustment.
Data Saving and Backup
The system must preserve invoices, notices, and technical files, and provide a clear means to create backups and restore data.
Users and Permissions Management
Permissions should be distributed according to user roles such as cashier, accountant, branch manager, and system administrator, while recording the operations performed by each user.
Error and Malfunction Management
The system should clarify the transmission results to the Fatoora platform, including:
- Accepted.
- Accepted with warnings.
- Rejected.
- Pending due to connection issue.
The method of resending and handling errors must also be clear, while avoiding the creation of duplicate transactions.
Integration with Accounts and Inventory
It is preferable to choose an integrated accounting system that links the invoice to sales movement, inventory, customer account, and payment method, rather than using a separate billing program that requires manual data transfer.
Scalability
You must verify the solution's ability to add:
- Users.
- Cashier devices.
- Warehouses.
- Branches.
- Companies or records.
- Integrations with online stores or payment gateways.
Support and Updates
Due to changing technical requirements and the gradual application of phase two, the solution provider should offer technical updates and necessary support to help the facility with setup and troubleshooting.
The accounting system provided by Aamal Raqmia also offers Arabic language support with the possibility of communicating around the clock when any technical issue occurs that may affect the workflow, or when cashier devices stop or invoices are rejected.
You can review procurement management solutions and distribution solutions and compare accounting, POS, and specialized systems according to the facility's nature.
How to Verify the Authority's Approval of the Software
You can verify the solution provider through the electronic invoicing solution providers list on the Authority's website, then search for the name "Aamal Raqmia", review the phase for which the provider has met the qualification conditions, and ensure the legal name and scope of the solution they provide.
The verification process can be implemented through the following steps:
- Go to the official website of the Zakat, Tax and Customs Authority.
- Access the Electronic Invoicing section.
- Open the Solution Providers list.
- Check the Phase One or Phase Two providers list.
- Search using the legal name of the service provider "Aamal Raqmia".
- Match the service provider data with the offer and contract details.
- Request clarification of the solution name and version that will be operated.
- Ensure inclusion of all required functions.
- Request a practical demonstration showing the integration process.
- Test a tax invoice, simplified invoice, and credit note.
Aamal Raqmia is approved within the list of electronic invoicing service providers
It is not enough to rely on the phrase "ZATCA compliant" mentioned by the software provider; rather, it is preferable to test the solution by:
- Issuing a simplified invoice and checking the QR.
- Sending the invoice to the platform.
- Issuing a standard tax invoice.
- Executing a return and creating a credit note.
- Verifying the appearance of the acceptance or rejection status.
- Adding a new cashier device.
- Simulating an internet outage case.
- Extracting an XML file.
- Reviewing the report of sent invoices.
- Showing the log of the user who issued the invoice.
Discover accounting systems and POS solutions compliant with electronic invoicing requirements.
Who Needs a ZATCA-Approved Accounting Software?
Facilities subject to the electronic invoicing regulation need a compliant technical solution that enables them to issue and save electronic invoices and notices and execute the requirements for the phase that applies to them.
This usually includes:
- Companies registered for VAT.
- Individual establishments subject to the regulation.
- Shops and retail stores.
- Restaurants and cafes.
- Pharmacies.
- Service companies.
- Contracting companies.
- Distribution companies.
- Hotels and serviced apartments.
- E-commerce stores.
- Companies operating through multiple branches.
- Entities issuing invoices on behalf of a taxable supplier.
Businesses that sell directly to individuals need a solution that supports simplified tax invoices and POS devices, while facilities dealing with other businesses need to manage buyer data and clear standard tax invoices.
As for restaurants, they often need a restaurant and cafe management software that links dine-in, delivery, and POS invoices with inventory and accounts. Aamal Raqmia confirms that DigitalPro software for restaurants supports VAT and compliance with Fatoora platform requirements.
Small companies operating from more than one location may need an integrated accounting solution that allows the accountant and management to track invoices, accounts, and branches according to permissions, with the necessity of testing the connection and the contingency plan for malfunctions.
Not entering one of the phase two groups does not mean the facility is not required to apply e-invoicing; they may be required to meet phase one requirements, then move to integration upon receiving the Authority's notification.
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How to Choose the Best ZATCA-Approved Accounting Software?
Choosing the best accounting software compliant with ZATCA requirements starts by identifying the facility's operational and tax needs, then actually testing the solution rather than settling for marketing catchphrases.
The most important criteria to consider include:
Determine Your Business Type
Determine the nature of the facility's activity, such as:
- Retail store.
- Service company.
- Restaurant or cafe.
- Distribution company.
- Contracting company.
- Hotel or hospitality facility.
- Online store.
- Multi-branch company.
Each activity has a different cycle for invoices, inventory, and reports.
Determine Invoice Types
Ask about the nature of your transactions through the following questions:
- Are sales made to individuals?
- Are there transactions with companies?
- Do I need both standard and simplified invoices?
- Are there credit sales?
- Does the activity involve a large number of returns?
- Are there online sales and points of sale?
Inventory Branches and Devices
Create an inventory of all:
- Branches.
- Cashier devices.
- Online stores.
- Sales apps.
- Servers or units issuing invoices.
- Third-party systems linked to sales.
This step is of particular importance because all issuance units within the facility's scope must be handled according to integration requirements.
Test Compliance
Ask the solution provider to perform a practical demonstration including:
- Setting up a device.
- Issuing a simplified invoice.
- Issuing a standard invoice.
- Generating a QR.
- Generating XML.
- Executing a clearance process.
- Executing a reporting process.
- Handling a rejected invoice.
- Issuing a credit note.
- Extracting an invoice report.
Review Accounting Functions
The software should not be limited to issuing invoices only, but check its ability to support:
- Chart of accounts.
- Journal entries.
- Receipt and payment vouchers.
- Customer and supplier accounts.
- Sales and purchases.
- Inventory.
- Bank reconciliations.
- Cost centers.
- Profit and loss.
- Tax reports.
You can also use POS and customer service solutions to track sales operations and customers when integrated with the accounting system data.
Review Security
Ask about the following aspects:
- Data encryption.
- Permissions management.
- Backup.
- Data storage location.
- Data retention period.
- Service recovery plan.
- Audit log.
- Two-factor authentication.
- Data export capability.
Examine the Contingency Plan
Test how the system handles the following cases:
- Internet outage.
- Fatoora platform breakdown.
- Cashier device failure.
- Invoice sending failure.
- Expiration of device certificate or credentials.
- Replacing a cashier device.
- Closing a branch or moving the system.
Calculate the Total Cost
Do not rely on the subscription price alone in your comparison, but calculate the full cost which includes:
- License or subscription.
- Users.
- Cashier devices.
- Branches.
- Configuration and integration.
- Training.
- Data migration.
- Support.
- Updates.
- Integrations.
- Hardware and printers.
You can also review the packages and pricing when comparing the subscription cost and available solutions.
How Does Digital Pro Accounting System Help You Achieve Compliance?
DigitalPro accounting system helps link e-invoicing to accounting and commercial operations, where the invoice, sales data, tax, payment method, and inventory movement are recorded within an interconnected system.
DigitalPro is also considered one of the integrated solutions for accounting, POS, and e-invoicing, ready to comply with ZATCA phase two requirements. Furthermore, Aamal Raqmia is listed or approved by the Authority in the field of electronic invoicing, providing a free trial version and professional technical support around the clock.
Among the most prominent functions that help the facility achieve compliance:
- Issuing invoices based on sales data.
- VAT support.
- Managing standard and simplified tax invoices according to system settings.
- Creating journal entries.
- Managing POS operations.
- Linking sales to inventory movement.
- Managing users and branches.
- Issuing returns and notes.
- Tracking payments.
- Preparing sales and profit reports.
- Providing cloud solutions.
- Supporting retail and restaurant operations.
- Working on multiple systems and devices according to the used solution.
You can benefit from integrated accounting and POS solutions if the goal is to link accounts, invoicing, POS, and inventory instead of running a separate program for each function.
Before making the final adoption decision, it is preferable to test the following scenarios:
- Cash sale to an individual.
- Credit sale to a company.
- Invoice containing more than one tax category.
- Applying a discount to an item or the entire invoice.
- Executing a partial return.
- Issuing a credit note.
- Closing a cashier shift.
- Handling connection loss.
- Adding a new device.
- Extracting a VAT report.
You can register and get the trial period to test the system on operations similar to your business, or book your consultation to clarify the number of branches, cashier devices, invoice types, and the integration date specified for the facility.
Ready to try the system?
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Frequently Asked Questions
What does a ZATCA-approved accounting software mean?
It means that the software supports the e-invoicing requirements of the Zakat, Tax and Customs Authority, and can be configured for the first phase and linked to the Fatoora platform in the second phase.
However, the Authority clarifies that the solution providers list is indicative and does not represent an official approval for every software or version, so the facility remains responsible for verifying the actual compliance of the used system with the requirements.
Do I need separate software for e-invoicing other than the accounting system?
Not necessarily, as you can use an integrated accounting system that includes e-invoicing functions, which helps avoid repetitive entry of sales data and reduces discrepancies between invoice and accounting data.
What is meant by the word "approved software"?
It is used to indicate that the software is compliant with ZATCA requirements or that the solution provider is included in the indicative list of qualified providers.
Is Digital pro software officially approved?
Yes, the software is approved by ZATCA for electronic invoicing, and DigitalPro is compliant with ZATCA and ready for phase two.
Is Digital pro suitable for shops, restaurants, and companies?
Yes, Aamal Raqmia for Software Solutions provides accounting solutions tailored for shops, restaurants, and companies with a set of features and integrations with various programs and services:
If you run a company, the integrated accounting solution may be suitable for you.
If you manage a restaurant or cafe, you can rely on the restaurant and cafe management software to suit the nature of your business.
If you are looking for a customized solution for your business nature, you can review packages and prices or book your consultation to speak with an expert and determine the most appropriate solution.
What are the requirements for phase two of electronic invoicing?
Requirements include linking the invoicing system to the Fatoora platform, configuring issuance units, generating XML, UUID, cryptographic stamp, and required QR elements, clearing standard invoices, reporting simplified invoices, saving response statuses, and preventing modification or deletion of invoices after issuance. The Authority targets facilities gradually, notifying the facility at least six months before the integration date.
Does the software support Value Added Tax (VAT)?
Yes, the software supports VAT and compliance with ZATCA requirements, especially within restaurant, accounting, and POS solutions.
Choosing an accounting software compliant with ZATCA requirements should depend on the actual extent of compliance, not on marketing descriptions alone, which distinguishes Aamal Raqmia as one of the leading companies in software and accounting solutions in Saudi Arabia and listed among the electronic invoicing service providers.
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