Stay compliant and boost efficiency — connect your invoicing system to ZATCA’s FATOORA for seamless e-invoicing, real-time approval, and smarter financial control.

Stay compliant and boost efficiency — connect your invoicing system to ZATCA’s FATOORA for seamless e-invoicing, real-time approval, and smarter financial control.

Integration and Connectivity in E-Invoicing in Saudi Arabia 2025

Is Your Company Ready for Phase Two of E-Invoicing?

In this phase, issuing electronic invoices alone is no longer sufficient. It is now mandatory to connect your company’s invoicing system directly to “FATOORA” platform operated by the Zakat, Tax, and Customs Authority (ZATCA).This integration ensures invoices are transmitted in real time for approval and provides companies with strategic advantages in organizing financial operations and improving overall efficiency.

What Is Integration and Connectivity?

Integration and connectivity refer to the process of linking a company’s electronic invoicing system with FATOORA platform via an Application Programming Interface (API).When an electronic invoice is issued, the system automatically:

Sends the invoice to ZATCA for review and approval.
Receives official authorization and a digital signature.
Returns the approved invoice to the company’s system for sharing with the customer.

This process enhances transparency, ensures more accurate and simplified financial reporting, reduces human error, and minimizes administrative costs.

How Did ZATCA Define the Targeted Groups?

ZATCA adopted a phased approach for implementing the second stage of e-invoicing. The rollout began with large enterprises based on annual revenue, then gradually expanded to include medium and small businesses.

• January 2023: Implementation began with large corporations whose annual revenues exceeded SAR 3 billion.
• Followed by companies with revenues above SAR 500 million.
• Then extended to medium-sized enterprises.
• April 2025: Implementation reached companies generating more than SAR 3 million annually, thereby including most commercial establishments in the Kingdom.

This gradual rollout gave each business ample time to upgrade its accounting systems and train its staff before the mandatory enforcement.

Technical and Administrative Requirements

Technical Requirements:

• Use of a ZATCA-approved e-invoicing system.
• Issuing invoices in XML or PDF/A-3 format containing embedded XML data.
• Support for digital signatures and QR codes on every invoice.
• Ability to integrate via API with FATOORA platform.
• Electronic archiving of invoices for at least six years.

Administrative Requirements:

• VAT registration and updated tax data.
• Inclusion of all mandatory invoice details (tax number, supplier and buyer information, VAT value).
• Training of financial and administrative teams on how to use the new system.

Steps to Enable Integration and Connectivity

Select an Approved E-Invoicing SystemChoose an officially certified accounting system that supports direct integration with FATOORA platform. Cloud-based systems in Saudi Arabia, such as Wazen, provide flexible and easy-to-use compliance solutions.
Prepare the Technical SystemConfigure the system to issue invoices in compliant formats, enabling digital signatures and QR codes.
Implement API IntegrationConnect your system securely to ZATCA’s platform for real-time invoice exchange.
Conduct Simulation TestsPerform trial runs to ensure correct invoice transmission and reception before going live.
Start Live IssuanceOnce tests are successful, begin full e-invoice generation and transmission to the authority.

How Integration and Connectivity Improve Internal Business Performance

E-invoicing integration is not just about regulatory compliance; it is a strategic tool that enhances internal efficiency and long-term business performance.

1. Improved Financial Process Efficiency

• Real-time, automated invoice issuance and approval reduce manual processing time.
• Fewer accounting errors due to automation.
• Simplified financial and tax reporting.

2. Increased Transparency and Accountability

• Each invoice is officially approved and archived, eliminating the risk of manipulation or alteration.
• Management gains real-time access to sales, revenue, and tax data.

3. Faster Decision-Making

• Integrated systems provide live financial reports, helping management make data-driven decisions.
• Easier analysis of business performance, including top clients and most profitable products.

4. Reduced Operational Costs

• Eliminating paper-based workflows cuts printing and storage costs.
• Automation reduces the need for additional accounting labor hours.

5. Enhanced Customer and Partner Experience

• Quick, approved e-invoice issuance builds trust with clients.
• Businesses using integrated invoicing systems appear more professional and reliable.

6. Enabling Growth and Expansion

• With a scalable system, businesses can expand without increasing administrative burden.
• Integration supports seamless multi-branch operations and larger client bases.

Common Mistakes During Implementation and How to Avoid Them

• Using a non-certified system: Always verify the system is on ZATCA’s approved list.
• Failure to enable digital signature or QR code: Configure the system according to technical requirements.
• Issuing invoices in incompatible formats: Only XML or PDF/A-3 are acceptable.
• Lack of employee training: Conduct workshops before the launch date.
• Skipping system testing: Run simulation tests before official rollout.

Penalties and Negative Consequences of Non-Compliance

1. Financial Penalties

• Fines for failure to issue e-invoices.
• Penalties for modifying or deleting invoices post-issuance.
• Heavier penalties for repeated violations or tax manipulation.

2. Restrictions on ZATCA Services

• Suspension of certain electronic services.
• Placement of the company on ZATCA’s intensive monitoring list.

3. Business Impact

• Disruption of commercial operations due to service suspension.
• Loss of customer and partner trust.
• Increased administrative costs for post-violation corrections.

Best Practices for Smooth Compliance

• Use a ZATCA-approved invoicing system with API integration.
• Regularly update tax data and company information.
• Train your team before implementation.
• Conduct early simulation testing.
• Rely on cloud-based systems offering accurate financial reports and easy dashboards, such as Wazen.

Conclusion

Integration and connectivity in e-invoicing are strategic milestones for every business operating in Saudi Arabia.Complying with Phase Two not only prevents fines but also enhances operational efficiency, improves financial reporting accuracy, and supports sustainable business growth.

Choosing the right system and preparing early are the keys to success, especially when using certified cloud-based accounting solutions that ensure seamless integration with FATOORA platform and effortless compliance.

Wazen offers one of the best e-invoicing systems in Saudi Arabia, with a 14-day free trial for companies and institutions to explore its features and services.

Read also:

• Issuing e-invoices via WhatsApp to simplify financial processes and reduce errors.
• Steps to create and implement an e-invoice.