E-invoice: A guide for companies to digital transformation
E-Invoicing: The Corporate Guide to Digital Transformation
Electronic invoicing has become a key element in managing sales and accounts within the Kingdom of Saudi Arabia. Relying on paper invoices or preparing them manually using Word or Excel is no longer sufficient to meet e-invoicing requirements. The facility needs a structured technical solution capable of issuing invoices and associated notes, saving them in the required format, and supporting integration with the Zakat, Tax and Customs Authority (ZATCA) platform when the facility enters the second phase.
The transition to e-invoicing is not merely about changing the invoice format, but extends to organizing customer, sales, and tax information, controlling the accounting sequence of invoices, managing returns and adjustments, and preparing cashier devices and branches to operate according to the requirements.
This guide reviews the concept of e-invoicing, its types and components, the entities obligated to issue it, the registration, integration, and issuance mechanism, in addition to the method of generating a QR code, the most prominent technical errors to avoid, and how to choose the appropriate e-invoicing software for your business activity.
What is E-Invoicing?
An electronic invoice is a document generated and stored electronically in a structured manner through an electronic system, encompassing the required tax invoice elements. Therefore, a handwritten invoice, a scanned image of a paper invoice, or a document prepared in a text editor and saved as a PDF is not considered an e-invoice fulfilling the system's concept.
The concept of e-invoicing means moving from issuing paper or manual invoices and credit/debit notes to a structured electronic process that allows data to be created, processed, stored, and exchanged between the buyer and the seller in a specific technical format.
The e-invoicing ecosystem is based on three interconnected elements:
- The invoice or note issued electronically.
- The system or device responsible for issuing the document.
- The means of storage, protection, and integration with the Fatoora platform upon implementing the second phase.
It is not enough for the e-invoicing software to display a formatted design or generate a PDF file; it must store the invoice data in a structured manner, maintain its sequence, prevent unauthorized modification or deletion, and support the technical requirements applicable to the facility.
Discover: An integrated accounting system among the list of e-invoicing service providers
Types of E-Invoices
Electronic invoices in Saudi Arabia are divided into two main types: the Tax Invoice and the Simplified Tax Invoice. The appropriate type is mostly determined by the nature of the customer and the transaction, not solely based on the size of the facility.
Tax Invoice
The tax invoice is issued when a transaction is executed between a business and another business (B2B), and includes buyer and seller information, tax-related data, and necessary supply details.
Among the most prominent data it includes:
- The selling facility's name and address.
- The seller's Value Added Tax (VAT) registration number.
- The buyer's name and required details.
- The buyer's Tax Identification Number (TIN) when requirements apply.
- Date of invoice issuance.
- The sequential number of the document.
- Description of goods or services.
- Quantities and unit prices.
- Discounts, if any.
- The taxable amount.
- Tax rate and value.
- Total before and after tax calculation.
Upon entering the integration and linking phase, the tax invoice is subject to the clearance mechanism approved by the Authority before delivering it to the customer, according to the requirements applied to the taxpayer.
Simplified Tax Invoice
The simplified tax invoice is used when selling from a business to an individual (B2C), which is why it is widespread in retail stores, supermarkets, restaurants, cafes, pharmacies, and other activities that rely on direct sales to consumers.
Among the data that typically appears in it:
- Document title.
- Seller's name.
- Seller's VAT registration number.
- Date and time of invoice issuance.
- Sequential number.
- Products or services data.
- Value Added Tax (VAT) amount.
- Total invoice amount after adding tax.
- Quick Response (QR) Code.
In the second phase, the simplified invoice must be issued by a configured technical solution, and then its XML data is reported to the Authority's invoicing system within a period not exceeding 24 hours from the time of issuance.
| Comparison Element | Tax Invoice | Simplified Tax Invoice |
|---|---|---|
| Common Use | Business to Business (B2B) transactions | Business to Consumer (B2C) transactions |
| Buyer Data | Required at a more detailed level | Usually does not need all detailed buyer data |
| Use in Stores | Less used in direct sales to individuals | Most used in retail and restaurants |
| Phase Two Mechanism | Cleared before being handed to the customer | Reported within the specified timeframe |
| QR Code | Applied according to phase requirements and the solution used | An essential element in the simplified invoice |
| Associated Notes | Credit or debit note of the same type | Simplified note linked to the original invoice |
Therefore, e-invoicing for stores requires a Point of Sale program capable of issuing the simplified invoice from each cashier device, along with registering the devices, managing branches, adjusting invoice sequences, and executing reporting correctly. You can rely on a Point of Sale (POS) system suitable for the nature of sales operations.
Components of the E-Invoice
The components of the e-invoice change according to the document type, the implementation phase, and the nature of the transaction. However, the invoice must contain identification, commercial, tax, and technical data that help understand the transaction and verify its authenticity.
Among the most prominent of these components:
Seller Data
This includes the supplier's name, address, VAT registration number, along with any other identification information required depending on the invoice type.
Buyer Data
Buyer information is more detailed in the tax invoice, including name, address, and Tax Identification Number.
The simplified invoice does not usually require the same level of buyer data, though there are specific cases that may require entering additional information.
Invoice Data
This includes:
- Document type.
- Sequential number.
- Date and time of issuance.
- Date of supply when it is different.
- Currency used.
- Payment method when needed.
Supply Details
This covers each good or service in terms of description, quantity, unit of measurement, unit price, in addition to discounts or additions and the taxable amount.
Value Added Tax (VAT) Data
This data clarifies:
- Tax category and rate.
- Tax amount for each category.
- Total taxable amount.
- Total tax amount.
- Final total of the invoice including tax.
Technical Data
Depending on the phase and document type, this includes:
- Quick Response (QR) Code.
- Universally Unique Identifier (UUID).
- Invoice counter.
- Previous invoice cryptographic hash.
- Cryptographic stamp.
- XML file data.
- Configured device or solution ID.
Official specifications show that mandatory fields are not identical across all invoice types. Therefore, the facility should not rely on a fixed template taken from another facility, but must use an integrated accounting system that determines the fields according to the document type and transaction nature.
Parties Obligated to Issue the E-Invoice
E-invoicing encompasses persons residing in the Kingdom who are subject to VAT, as well as the customer or third party who issues a tax invoice on behalf of the taxable supplier.
When the conditions of subjection are met, this includes:
- Companies.
- Individual establishments.
- Retail stores and shops.
- Restaurants and cafes.
- Service providers.
- E-commerce stores.
- Facilities operating branches or points of sale.
- Parties issuing invoices on behalf of the supplier.
As for the taxable person not resident in the Kingdom, they fall outside the scope of the obligation to issue electronic invoices according to the scope outlined in the detailed guide.
The obligation is not determined merely by the legal form of the facility; being an individual establishment does not mean automatic exemption. Rather, it is related to the tax status of the taxpayer, the nature of the transaction, and the extent to which it falls within the scope of the e-invoicing regulation.
Furthermore, not all facilities enter the second phase at the same time, as the Authority implements integration in groups, and the targeted taxpayer is notified at least six months before the integration date set for them.
Objectives of Implementing E-Invoicing
E-invoicing seeks to develop the mechanism for issuing and storing invoices, improve data quality, and enhance compliance, thereby supporting digital transformation in commercial transactions.
Among its most prominent objectives:
- Reducing reliance on paper documents.
- Minimizing manual entry errors.
- Raising the efficiency of accounting and record-keeping.
- Facilitating the documentation of transactions and referencing them.
- Increasing the reliability of sales and tax data.
- Enhancing consumer protection.
- Supporting fair competition.
- Reducing undocumented transactions.
- Raising the level of compliance with tax requirements.
- Supporting digital transformation in line with the Kingdom's directions.
- Facilitating integration between invoices and accounting systems.
- Improving the ability to detect abnormal operations.
The e-invoicing system also achieves operational benefits within the facility, where each invoice can be linked to customer data, inventory, payment method, branch, and sales representative, instead of dealing with it as an independent document whose impact does not directly reflect in reports.
Phases of Implementing E-Invoicing in Saudi Arabia
The implementation of e-invoicing in Saudi Arabia went through two main phases; the first started with issuing and storing invoices electronically, then the second came to add requirements for integration and linking with the Fatoora platform.
| Phase | Implementation Start Date | Main Obligation |
|---|---|---|
| Phase One | December 4, 2021 | Issuing and storing invoices electronically |
| Phase Two | Began gradual implementation on January 1, 2023 | Linking the system to the Fatoora platform and applying additional technical requirements |
Phase two is implemented on groups determined by the Authority according to its criteria. A facility does not wait for the completion of the phase on all groups, but complies with the date specified in the notice directed to it.
E-Invoicing Phase One: Issuance and Storage
Phase one launched on December 4, 2021, compelling those covered by the regulation to stop using handwritten invoices or those prepared by text and spreadsheet programs in a way that does not meet e-invoicing requirements.
Requirements of this phase include:
- Using a technical solution compatible with the requirements.
- Issuing invoices and notes electronically.
- Including mandatory elements in the document.
- Storing invoices electronically.
- Having a clear sequential number for invoices.
- Displaying a QR code on simplified invoices.
- Not deleting or modifying the invoice after its issuance.
- Issuing a credit or debit note when correction is needed.
- Securing login data and the operations log.
Phase one alone does not impose direct integration with the electronic system belonging to the Authority, but it requires basic readiness and issuing documents electronically in accordance with the type of invoice.
E-Invoicing Phase Two: Integration and Electronic Linking
The implementation of the second phase began gradually on groups starting January 1, 2023, requiring the linking of the taxpayer's invoicing solutions with the Fatoora platform of the Zakat, Tax and Customs Authority.
Phase two includes additional requirements, such as:
- Configuring each device or issuance unit.
- Obtaining the cryptographic stamp identifier.
- Issuing documents in XML or PDF/A-3 format embedding XML, according to usage.
- Adding the UUID.
- Including the cryptographic hash and required security data.
- Linking the sequence of invoices.
- Applying the cryptographic stamp in cases that require it.
- Clearing standard tax invoices.
- Reporting simplified invoices within 24 hours.
- Using the enhanced QR Code.
- Enabling connection to the Fatoora platform via APIs.
Standard invoices are subject to clearance before being shared with the customer, while the simplified invoice is issued to the customer and then its data is uploaded to the platform within the specified period.
Why is Compliance with Both E-Invoicing Phases Important?
Complying with phase one does not mean the facility will not be required for phase two when the integration notice arrives. Likewise, preparing for phase two requirements while neglecting the basics of issuance and storage does not mean achieving full compliance.
The importance of compliance is evident in several aspects, including:
- Avoiding the issuance of documents that do not meet the requirements.
- Maintaining the correct sequence of invoices.
- Protecting the information of the facility and customers.
- Reducing the likelihood of document rejection.
- Issuing notes in a sound manner.
- Unifying cashier devices and branches.
- Facilitating tax and accounting audit works.
- Reducing the chances of sales halting due to system unreadiness.
- Minimizing the need to make urgent modifications to the system as the integration date approaches.
Violations classifications include multiple cases, such as failing to issue invoices within statutory periods, deleting and modifying them after issuance, not storing them, not sharing them with the Authority, or neglecting required fields or the QR Code.
Therefore, it is best for the facility not to wait until the last days before the integration date, especially if it manages a number of branches or cashier devices, or has integrations with an e-commerce store and points of sale.
How to Register for E-Invoicing
How to register for e-invoicing does not mean creating a separate account for each facility just to start phase one. The process starts from registering the facility for tax when registration conditions are met, then using a compliant e-invoicing system.
As for setting up integration with the Fatoora platform, this is done when the facility enters the second phase.
The process can be arranged as follows:
- Verifying the facility's status regarding VAT registration.
- Reviewing the facility's data, tax number, and address.
- Choosing a suitable e-invoicing software.
- Configuring invoices, taxes, and branches data.
- Starting to issue invoices electronically according to phase one requirements.
- Monitoring the Authority's notices regarding the integration phase.
- Logging into the Fatoora platform when the facility is targeted.
- Configuring invoice issuance units and devices.
- Executing compliance tests before actual operation starts.
- Monitoring acceptance, warning, and rejection statuses.
When configuring the device inside the Fatoora platform, the taxpayer uses approved login credentials, then selects the function to onboard a new unit or device, after which a One-Time Password (OTP) is generated.
The password remains valid for one hour, so it must be entered into the technical solution unit within this timeframe.
Technical details differ according to the software used; therefore, the solution provider usually handles them in cooperation with the facility manager, while the facility remains responsible for the accuracy of its data and ensuring all devices issuing invoices are prepared.
Requirements for Issuing E-Invoices in Saudi Arabia
Issuing an e-invoice requires the use of a program or system that does not contain prohibited functions, and can generate, store, protect, and share the invoice in a manner compliant with the phase applied to the facility.
Among the most prominent practical requirements:
- Issuing the invoice via a compliant electronic system.
- Adding all mandatory fields.
- Determining the correct invoice category.
- Using a unique and sequential number.
- Recording the date and time accurately.
- Calculating VAT correctly.
- Adding required seller and buyer data.
- Clarifying products or services in the document.
- Displaying the QR Code when requirements apply.
- Storing invoices and notes.
- Preventing deletion or modification of the invoice immediately after its issuance.
- Using a credit or debit note when correction is needed.
- Protecting user accounts.
- Keeping an operations log.
- Supporting XML and security requirements in phase two.
- Linking issuance devices to the Fatoora platform when the facility is targeted.
- Reporting malfunctions through designated channels when they occur.
The solution must also prevent logging in using insecure credentials, resetting the invoice counter, changing the sequence, modifying the device time in a way that affects invoices, or extracting the cryptographic stamp key to use it on another device.
Phases of E-Invoicing Integration
E-invoicing integration is done by preparing the system and devices, then conducting compliance tests and obtaining production data, after which the process of sending or clearing invoices begins depending on the document type.
The process consists of the following phases:
- Receiving the Authority's Notice
The facility reviews the integration date assigned to it, as well as the branches and entities covered by the notice.
- Updating the Technical Solution
It must be ensured that the invoicing software supports XML, security, and integration requirements, in addition to the enhanced QR code.
- Reviewing the Facility's Data
The review includes the facility's names, addresses, tax number, branches, cashier devices, and types of invoices used.
- Logging into the Fatoora Platform
The taxpayer logs in using their registered credentials, then navigates to the units and devices onboarding functions.
- Generating a One-Time Password
The taxpayer determines the number of issuance units required to be prepared, then generates an OTP valid for one hour.
- Configuring Each Device or Unit
The password is entered within the technical solution, then a Compliance CSID request is created, linking the unit to the platform.
- Compliance Testing
The system sends samples of the required invoices and notes to test validation rules.
- Obtaining Production Data
After successfully passing the tests, the solution obtains the Production CSID cryptographic stamp identifier according to the onboarding steps.
- Starting Clearance or Reporting
The standard invoice is sent for clearance, while the simplified invoice is reported within 24 hours.
- Reviewing Sending Results
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The Fatoora platform indicates accepted documents, accepted with warnings, and rejected ones, and reports detailing errors and warnings can be extracted.
Every physical issuance unit must be configured according to the system's architecture; preparing one device does not mean that all branch devices are automatically configured.
How to Extract the E-Invoice?
The e-invoice is extracted using an invoicing program or an accounting system configured for this purpose, not by entering data manually and then saving it in a file.
The method of creating an e-invoice proceeds according to the following steps:
- Log in to the system.
- Select the document type, whether standard tax or simplified.
- Choose the customer or enter their required details.
- Add products or services.
- Record quantities and prices.
- Apply allowable discounts.
- Review VAT categories and rates.
- Determine the payment method.
- Verify the total invoice amount.
- Issue the invoice through the system.
- Execute clearance or reporting based on the document type and phase.
- Share the readable copy with the customer.
- Save the invoice file and associated records.
When using an integrated accounting system, the invoice can be linked to the sales transaction, inventory, customer account, payment method, and reports, instead of creating a document separate from the rest of the accounting operations.
As for facilities that need to manage accounts and invoices from multiple locations, they can choose the solution that suits the number of branches, users, and their invoice issuance mechanism.
How to Build the QR Code
The QR code in the e-invoice is generated based on a specific set of data, arranged according to the Tag-Length-Value format, known as TLV. The data is then encoded using Base64 and a readable code is generated.
The TLV system consists of the following elements:
- Tag: The field number or identifier.
- Length: The length of the field's value after encoding.
- Value: The actual data of the field.
In Phase One, the code contains five basic fields:
| Tag Number | Data |
|---|---|
| 1 | Seller's Name |
| 2 | Seller's VAT Registration Number |
| 3 | Time and Date of Invoice Issuance |
| 4 | Invoice Total including VAT |
| 5 | Total VAT Amount |
With Phase Two requirements, the following security fields are added:
| Tag Number | Data |
|---|---|
| 6 | XML File Cryptographic Hash |
| 7 | ECDSA Signature of the Cryptographic Hash |
| 8 | ECDSA Public Key |
| 9 | ZATCA's Technical Signature of the Cryptographic Stamp Public Key (for simplified invoices and their notes) |
The specifications determine the mechanism for storing each Tag and the length of its specific value. Therefore, data sorting and encoding must be executed accurately using UTF-8 then Base64.
It is not preferable for the user to create the QR manually, as the e-invoicing software should generate it automatically based on the actual data present in the invoice file. Generating a QR image that contains plain text or a link to a website does not make the document compliant.
You can also check the content of the code using the tools provided by the Authority, but merely succeeding in the QR scanning process does not necessarily mean that all invoice elements are met; the document must pass the rest of the compliance rules as well.
Common Errors When Issuing an Invoice in the Saudi E-Invoicing System
An invoice may look intact when viewed, but it might face rejection or be deemed non-compliant due to a missing mandatory field, an error in tax data, or an issue in the XML structure or the QR code.
Among the most widespread errors:
- Selecting an inappropriate invoice type.
- Relying on outdated tax data.
- Failing to register all cashier devices.
- Using a separate sequence that has not been properly configured.
- Making a modification to the invoice after issuing it.
- Failing to link a note to the original invoice.
- Sending the simplified invoice after the specified deadline has expired.
- Ignoring warning or rejection messages.
- Believing that a PDF file alone represents a structured electronic invoice.
- Generating a QR that does not reflect the true data of the invoice.
Writing an Incorrect Title in the Invoice
The document title must reflect the correct invoice type, such as "Tax Invoice" or "Simplified Tax Invoice." Using a generic title or selecting a type that doesn't fit the transaction nature could lead to the loss of elements associated with the correct document type.
You must also differentiate between:
- Original Invoice.
- Credit Note.
- Debit Note.
- Standard Tax Invoice.
- Simplified Invoice.
The type of note must be compatible with the type of original invoice being corrected.
Not Adding the VAT Registration Number
The seller's VAT registration number is considered essential information, so it must be correctly entered within the facility's settings to automatically appear on invoices, the QR code, and the XML file.
The tax invoice type may require entering the buyer's tax number when conditions apply. Neither a Commercial Registration (CR) number nor a unified distinctive number should be used in place of the VAT registration number.
XML rules validate the format of the Saudi tax number, including the digit count and conditions concerning its beginning and end.
Lack of Sales Transaction Details
The invoice should not be limited to displaying only the final amount; it must show the goods or services, quantities, prices, discounts, tax, and the required totals.
Forms of errors in this aspect include:
- Using a uniform description like "Sales" for all products.
- Not recording the quantity.
- Showing the tax value without clarifying the taxable amount.
- Omitting discounts.
- Failing to differentiate between tax categories.
- Not entering the reason for exemption or the zero rate when needed.
- A discrepancy between the displayed total and the XML data.
It is better to link the invoice to an organized database of products and services so that each employee does not enter descriptions or tax data in a different style.
Absence of the Quick Response (QR) Code
The QR code must be displayed in cases that require it, especially in simplified tax invoices. It is not enough to put a random code; it must contain the required encrypted data and be clear and readable.
Among the most prominent issues related to it:
- Printing the code at a size that does not allow for easy reading.
- Poor print quality.
- Cropping part of the code during printing.
- Using a background that affects its visibility.
- Creating the code from a link instead of TLV data.
- A discrepancy between the total found in the code and the invoice total.
- Continuing to use the phase one code after the facility enters phase two without updating it.
The QR should be tested on the actual print templates used in point of sale (POS) and cashier devices, not merely testing it on a device screen.
Writing Notes with Negative Values
When discovering an error or executing a return transaction, the original invoice should not be modified, nor should a regular sales invoice with a negative value be used as a general solution for correction.
Correction is done through:
- A credit note when reducing the supply value, tax, or refunding an amount to the customer.
- A debit note when increasing the value or tax due.
The note must be linked to the original invoice or related invoices, clarifying the reason for issuance and selecting the appropriate document type.
Additions Between TLV Numbers
QR data should be constructed according to the specified TLV sequence, without inserting uncalculated commas, symbols, or spaces between the fields.
Among the potential technical errors:
- Treating the Tag number as text rather than a byte.
- Calculating the number of characters instead of the UTF-8 array length.
- Adding a separator between fields.
- Arranging Tags incorrectly.
- Converting data to Base64 before forming a complete TLV record.
- Using inappropriate character encoding.
- Entering Arabic numerals in a format that differs from the data present in the XML.
- Adding a Tag that does not exist within the specified sequence.
For this reason, the system must handle the generation of the code automatically, as building a QR manually or using a generic QR generator may produce a scannable code, but it will not necessarily comply with technical requirements.
Difference Between Tax Invoice and E-Invoice
The term "tax invoice" refers to the type of document and its legal and tax content, while "e-invoice" describes the method of generating, storing, and processing the document.
Consequently, a tax invoice can be electronic when it is issued from a compliant accounting system that meets the requirements.
| Point of Comparison | Tax Invoice | E-Invoice |
|---|---|---|
| Concept | A document proving a taxable supply containing tax data | An invoice issued and stored in a structured electronic format |
| Focus | Tax data related to the transaction | Method of issuance, storage, and exchange |
| Types | Standard or simplified tax | Includes both types when issued electronically |
| Format | Can be in a human-readable format for the customer | Includes structured data and a technical file |
| System Used | Could previously be issued on paper | Must be issued via an electronic solution |
| Modification | Subject to invoicing and tax rules | Correction is done electronically through a credit/debit note |
Based on this, sending an image of a paper tax invoice via email does not turn it into an electronic invoice according to the regulatory concept.
How Can the Accounting System Help You Create an E-Invoice?
An integrated accounting system helps create an invoice based on actual sales data, then recording the operation's impact in accounts, inventory, customers, taxes, and reports, instead of repeating the entry of the transaction in more than one place.
Among the functions the system can provide:
- Selecting the invoice type.
- Entering facility data automatically.
- Retrieving customer information.
- Calculating Value Added Tax (VAT).
- Generating the invoice number and its sequence.
- Creating the XML file.
- Generating the QR Code.
- Executing clearance or reporting.
- Recording accounting entries.
- Updating inventory data.
- Tracking paid and remaining amounts.
- Issuing return notes.
- Storing invoices.
- Displaying acceptance and rejection statuses.
- Preparing sales and tax reports.
The integrated accounting system helps link the invoicing process to accounts instead of separating it from them, reducing the chances of a discrepancy between cashier software sales and the values recorded in financial reports.
You can also benefit from reports tied to the system to track invoices, returns, sales, expenses, and tax indicators, so that the reports are built on data recorded in the system.
It is preferable to choose a solution based on the nature of the sector; a store needs a POS system, while a restaurant needs a Restaurant and Cafe Management System that links dine-in and delivery invoices with inventory and accounts. Hospitality facilities need to link invoicing with bookings and payments through a Hotel System or a solution fitting their operation cycle.
You can also book your consultation to determine the appropriate and customized solution for the nature of your project.
DIGITAL PRO - ZATCA Certified Accounting Software
DigitalPro is an accounting and POS system configured for Phase Two e-invoicing requirements, supporting invoices, taxes, sales, inventory, and branches, functioning as an accounting software and systems solution listed among the e-invoicing service providers.
It should also be clarified what is accurately meant by certification or listing; the list of solution providers offered by the Authority is an indicative list of companies that have met qualification conditions, but it does not shift compliance responsibility away from the taxpayer, as the facility can use any provider provided that the system actually used is compliant with ZATCA requirements.
Among the features DigitalPro system provides:
- Managing accounts, sales, and purchases.
- Points of Sale (POS).
- Inventory management.
- Electronic invoices.
- VAT support.
- Returns management.
- Branch and user management.
- Sales and profits reports.
- Cloud solutions.
- Customized solutions for restaurant and retail activities.
Before subscribing, it is advised to conduct a practical test that includes:
- Issuing a simplified tax invoice.
- Creating a standard tax invoice for a business.
- Scanning the QR code.
- Executing a return operation and issuing a credit note.
- Reviewing the XML file.
- Testing a connection outage scenario.
- Reviewing rejected invoice reports.
- Configuring a new cashier device.
- Extracting a tax report.
- Testing operations across more than one branch.
You can review available solutions, then register and get a trial period to test issuing invoices through scenarios similar to actual operations in your facility.
Explore the services and solutions, then book your consultation to ensure the system suits your invoice types, number of branches, cashier devices, and the integration phase applied to your facility.
Frequently Asked Questions About E-Invoicing
Are individual establishments obligated to use e-invoicing?
Yes, an individual establishment is obligated when it is a resident person subject to VAT and falls within the scope of the e-invoicing regulation. The obligation does not depend on whether the business is a company or an establishment, but on its tax status and the nature of transactions for which invoices are issued.
Do all accounting software issue electronic invoices?
No. Some programs may allow generating a printed invoice or PDF without providing XML, QR, security, and integration requirements. Therefore, you must ensure the software supports the invoice type and the phase applied to the facility, and that all devices and settings are configured correctly.
What companies are obligated by e-invoicing?
Resident facilities and persons subject to VAT are obligated, in addition to third parties who issue invoices on their behalf. Phase Two encompasses facilities targeted by the Authority according to groups and dates specified in notices.
Is a digital signature required on the e-invoice?
The user does not need to place a visible manual signature on the invoice. In Phase Two, there are security requirements involving a cryptographic stamp, a technical electronic signature, and credential data depending on the invoice type. The technical solution generates these elements automatically after configuration, and the user should not create them or transfer their keys manually.
What procedures should be followed if an error is discovered after issuing an e-invoice?
The invoice is neither deleted nor modified after issuance. Instead, an electronic credit or debit note linked to the original invoice is issued, explaining the reason for correction. It is then saved and either sent or cleared depending on the document type and the applied phase.
What are the requirements for issuing an e-invoice?
Requirements include using a compliant system, adding required fields, the sequential number, tax data, and supply details, displaying the QR when applicable, saving the document, preventing deletion and modification, in addition to applying XML, integration, and security requirements in Phase Two.
How can an e-invoice be created?
The invoice is created using e-invoicing software by selecting its type and entering customer, item, and tax data, then issuing it from the system. The software takes care of generating the number, QR, and XML file, and executes clearance or reporting according to approved settings.
What are the phases of linking/integrating the e-invoice?
The process starts with reviewing the Authority's notice, then updating the system, logging into the Fatoora platform, configuring devices using an OTP, conducting compliance tests, obtaining production credentials, and then starting to clear standard invoices and report simplified invoices.
How do I extract the e-invoice?
This is done by using a compliant software, entering the facility's, customer's, product's, and tax data, then reviewing the document and issuing it. After that, the system executes platform procedures according to the invoice type. A readable copy can be printed or shared with the customer while the structured file is saved.
What is the invoice sequential number?
It is a unique and sequential number that distinguishes each invoice issued by the technical solution. The regulation does not specify a unified format for all facilities, and there can be an independent sequence for each branch provided that each invoice is clear and unique and each sequence maintains a structured order.
What companies are exempt from e-invoicing?
The regulation excludes taxable persons not resident in the Kingdom from the scope of electronic issuance as clarified. As for unregistered resident facilities or transactions that do not require a tax invoice, their status must be evaluated according to the VAT law and the transaction nature; an exemption should not be assumed without reviewing the facility's status.
Is e-invoicing mandatory for export?
Yes, the Authority clarified that export operations require issuing an electronic invoice according to the regulation. Conversely, the import process itself is not subject to the e-invoicing regulation in terms of issuing a Saudi invoice for the foreign supplier. The export category must be selected, and buyer and tax data must be entered correctly within the system.
In Conclusion:
Electronic Invoicing represents an integrated ecosystem for issuing, storing, protecting, and linking invoices with accounts and taxes; it is not just a PDF file or a QR code. Compliance begins by determining the appropriate invoice type, using a suitable technical solution, setting up the facility and branches data, and then executing integration requirements upon receiving the Authority's notice.
Test the e-invoicing software through realistic operations before adopting it, and verify its capability to handle standard and simplified invoices, notes, returns, XML, QR, and device management.
Then book your consultation to review your facility's readiness and choose the solution that fits its activity and the e-invoicing implementation phase applied to it.
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