Kingdom of Saudi Arabia is undergoing a major digital transformation, and one of the key developments in this journey is the implementation of e-invoicing (Fatoorah). As of 2021, the Zakat, Tax and Customs Authority (ZATCA) has mandated e-invoicing for all VAT-registered businesses in the country. This change has made e invoicing software saudi arabia not just important—but absolutely essential.
In this guide, we’ll walk you through what e-invoicing is, why it’s mandatory, how to comply with ZATCA’s regulations, and how to choose the right e-invoicing software for your business in Saudi Arabia.
What is E-Invoicing?
E-invoicing, or electronic invoicing, is the process of issuing, receiving, and storing invoices in a digital format. Instead of creating paper invoices or PDF files manually, businesses use specialized software to generate invoices that are:
Structured in a machine-readable format (usually XML or UBL)
Integrated directly with the tax authority’s system
Securely transmitted, verified, and archived
In Saudi Arabia, this entire process is governed by ZATCA and is rolled out in two phases.
Why E-Invoicing Is Mandatory in Saudi Arabia
The Saudi government introduced e invoicing software saudi arabia to:
Reduce tax evasion and fraud
Increase transparency in business transactions
Enhance compliance with VAT laws
Improve efficiency in business operations
The e-invoicing system (Fatoorah) is part of Saudi Vision 2030, which aims to modernize the Kingdom’s economy by integrating more digital tools across all sectors.
You can learn more about this initiative on the official ZATCA website.
Understanding ZATCA’s E-Invoicing Phases
ZATCA divided e-invoicing into two main phases:
Phase 1 – Generation Phase (Started 4 December 2021)
All VAT-registered businesses in Saudi Arabia were required to:
Stop issuing paper or manual invoices
Start using e-invoicing software to issue compliant invoices
Ensure invoices contain mandatory fields, like VAT number, QR code, and timestamps
Phase 2 – Integration Phase (Started 1 January 2023)
In this phase, businesses must:
Integrate their systems with ZATCA’s platform (Fatoorah)
Transmit invoice data in real time
Use software that complies with ZATCA’s technical and security standards
ZATCA rolled out this phase in waves, starting with large taxpayers, and continues to expand coverage.
Who Needs to Use E-Invoicing Software in Saudi Arabia?
All VAT-registered businesses in Saudi Arabia must comply. This includes:
Retailers and wholesalers
E-commerce platforms
Freelancers and consultants
Service providers
Import/export businesses
Even if you only issue a few invoices per month, you must switch to e-invoicing if you're VAT-registered.
Key Features of a ZATCA-Compliant E-Invoicing Software
When choosing e-invoicing software in Saudi Arabia, make sure it offers the following:
✅ ZATCA Compliance
The software must support:
XML/UBL format
UUID generation
QR code generation
Cryptographic stamping
Invoice encryption and archiving
Real-time integration with ZATCA’s API
✅ Cloud-Based Access
You should be able to access your invoices securely from anywhere. Cloud-based tools make it easier for teams to collaborate and for remote access to financial records.
✅ Arabic English Support
Invoices in Saudi Arabia must include Arabic as the primary language, but having bilingual support is helpful for international teams and customers.
✅ Integration with Accounting ERP
Look for software that integrates easily with tools like:
SAP
Oracle NetSuite
QuickBooks
Zoho Books
This reduces manual entry and syncs financial data in real time.
✅ Automatic Archiving
Saudi regulations require invoices to be archived for at least 6 years. Your e-invoicing solution should automatically store and organize invoices for future audits.
✅ Customization User-Friendly Interface
A good interface makes it easier for your team to create, track, and manage invoices without heavy training.
Top E-Invoicing Software in Saudi Arabia (2025)
Here’s a list of popular and ZATCA-compliant software providers operating in the Kingdom:
1. Zoho Books
ZATCA Phase 1 2 ready
VAT-compliant invoicing
Arabic language support
Cloud-based with mobile apps
? Explore Zoho Books Saudi Arabia
2. Sage 50cloud
Built for small and medium-sized businesses
VAT and ZATCA compliant
Custom invoice templates
? Visit Sage Saudi Arabia
3. QuickBooks Online
Easy integration with banking and payroll
Real-time reports and invoice tracking
Offers compliance with Saudi VAT regulations
? QuickBooks ME
4. FreshBooks
Simple interface for freelancers and startups
Supports bilingual invoicing
ZATCA compliance may require additional integrations
? FreshBooks Global
5. TallyPrime (Gulf Edition)
Tailored for businesses in the GCC
Strong compliance features for VAT and invoicing
Supports Arabic and English
? Tally Solutions
6. SMACC
A local Saudi-based accounting and e-invoicing solution
Fully compliant with ZATCA’s technical specifications
Offers POS, inventory, HR, and CRM modules
? SMACC Saudi
Benefits of Using E-Invoicing Software in Saudi Arabia
Let’s break down the key benefits:
1. Legal Compliance
Avoid heavy fines and penalties by staying compliant with ZATCA's rules.
2. Time Efficiency
Automate the invoice creation and submission process, reducing manual work.
3. Faster Payments
Clear, accurate invoices get processed faster, improving your cash flow.
4. Reduced Errors
E-invoicing eliminates common manual mistakes like wrong VAT calculations or missing fields.
5. Secure Archiving
Invoices are stored digitally with encryption, ensuring safety and easy retrieval.
6. Real-Time Reporting
With direct integration to ZATCA’s system, you get access to real-time invoice submission status and feedback.
How to Get Started With E-Invoicing in Saudi Arabia
If you're new to e-invoicing, here are the steps to begin:
Step 1: Understand ZATCA Requirements
Download ZATCA’s e-invoicing guide and review technical specifications: ? ZATCA E-Invoicing Guidelines
Step 2: Choose ZATCA-Compliant Software
Pick a tool that meets both your business needs and government compliance.
Step 3: Register Configure the Software
You may need to register your system on ZATCA’s portal and link your digital certificate or device identity.
Step 4: Train Your Team
Make sure your finance and operations team understand how to issue compliant invoices.
Step 5: Test Go Live
Run test invoices before you fully switch. Most software providers offer sandbox testing environments.
Common Mistakes to Avoid
When transitioning to e-invoicing, avoid these common pitfalls:
❌ Using non-compliant software
❌ Failing to include QR codes or UUIDs
❌ Not storing invoices properly for audits
❌ Ignoring ZATCA integration deadlines
❌ Not training staff adequately
Future of E-Invoicing in Saudi Arabia
Saudi Arabia is just getting started. In the future, we can expect:
More automation in tax filing
Advanced analytics using invoice data
Integration with customs and import/export systems
Cross-border e-invoicing for GCC and international trade
Staying up to date with ZATCA updates is crucial. Subscribe to their news section or follow ZATCA on Twitter for real-time updates.
