As the E-Invoice generation deadline of Dec 4^th,2021 is approaching fast we are pleased to share that Zakat,Tax and Customs Authority (ZATCA)  has named Hyphen Consultancy’s GoFatoorah as the qualified E Invoice solution provider in the Kingdom of Saudi Arabia.

Our solution caters to both B2B and B2C customers. If an organization is currently generating manual invoices, it can opt for our end-to-end invoice management solution that complies with all the requirements of ZATCA including the QR Code,UUID,hash algorithm etc.In addition to regulatory requirements the solution offers some prominent features like bulk upload of products and customers historical data, automatic translation from English to Arabic and user role management to ensure segregation of duties. Each company based on its own requirements can allocate the roles to different users in the company. In short either you are a one man company or of thousands GoFatoorah is flexible enough to cater to the requirements of all.

For companies that are currently using any system/ERP they can opt for GoFatoorah interface for conversion of invoices into E Invoice and then integration with the ZATCA system.

Go Fatoorah offers different subscription based packages with no upfront or hidden charges.

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invoices & e-invoices

𝗲-𝗶𝗻𝘃𝗼𝗶𝗰𝗶𝗻𝗴 is the exchange of an electronic invoice document between a supplier and a buyer. 

The word “e” is an interesting one. For a fruit vendor running his shop at the corner of the road, an invoice generated from MS Word vs the manual one on a paper is an e-invoice, and for a small business owner who has just started using free accounting software, an invoice from that system vs. the one from the MS Word is an e-invoice.

Now that we have touched upon various angles through which an 𝗲-𝗶𝗻𝘃𝗼𝗶𝗰𝗶𝗻𝗴 can be done, it’s essential to understand what an e-invoice is from the GAZT lens, which brings us to our 1st point : the definition of e-invoice as per the GAZT regulations.

1. What exactly is an e-invoice?(e-invoicing)

According to the GAZT regulations, “the electronic invoice is defined as an invoice generated, stored, and amended in a structured electronic format through an electronic solution, which includes all the requirements of a tax invoice. A handwritten or scanned invoice is not considered an Electronic Invoice”.

Language Used for e-invoice

XML (e Extensible Markup Language), the primary purpose of which is the transportation of data in both machine-readable and human-readable format, is the language in which these e-invoices will be created as per the GAZT.

After familiarizing ourselves with the definition of e-invoice as per GAZT, the characteristics of an e-invoice and the electronic language used to generate an e-invoice, let us now move on to our 2^nd most important point regarding the implementation of e-invoicing: i.e., the relevant standards required to be met for an e-invoice as per the GAZT.

2. Relevant standards for e-invoice:

There are global standards that are generally used for e-invoicing and GAZT has also referred to the same.

It is important to understand here which rules takes precedence over the others as mentioned below.

Now that we have understood the definition of e-invoice, the characteristics of e-invoice and the required standards, the question now is how to move forward. In this context, the 3rd most important item to be known is: the right approach that must be followed for handling the implementation of the e-invoicing project.

3. How to approach the project?

Following is our recommended approach for the successful implementation of the e-invoicing as per the GAZT regulations.

Following are the timelines for the complete implementation of the e-invoicing throughout the KSA.

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As part of bringing transparency in the entire value chain of business transactions and for plugging the tax gap, Saudi Arabia started moving towards adopting the e-invoicing in the kingdom. The Zakat, Tax & Customs Authority (ZATCA) first published the e-invoicing regulations on December 04, 2020 and then issued further details on May 28, 2021 related to the controls, requirements, technical specifications and procedural rules for implementing the provisions of the E-invoicing Regulations.

ZATCA has taken a phased approach to implement e-invoicing in the kingdom. Each of the phase has its own requirements that need to be complied with according to the timelines as below.

• Thinking that an E-Invoice Solution or your existing system on its own is sufficient

Based on our interaction with various entities in the Kingdom below are the 3 mistakes the organizations may fall prey to and must be avoided.

For an organization that is currently not using any system for invoice generation, an obvious choice would be to procure and start using an E-Invoice solution available in the market. However, for entities that already have an ERP or an invoicing system, simply getting an E-Invoice software is not a solution to the problem. They need to start from making the requisite changes in the existing system to generate an invoice in a form that can be converted into an XML format through an E Invoice Solution. Some of those changes may be as follows:

On the other hand, thinking that the existing system will help all the way along may not be a feasible option for many companies. For instance, existing invoicing systems may not be customizable for implementing the hashing algorithm, data encryption, XML conversion, etc. for which one needs to use an E Invoice Solution.

2. Focusing on Dec 4^th,2021 Timeline only

It’s true that certain requirements are to be fulfilled only till Dec 4^th 2021 and many in the next phase starting from Jan 01, 2023. Organizations may fall into prey of getting an e-invoicing solution that currently meets the needs of Dec 4^th timeline only. This may result in additional costs or changes in procured e-invoicing solution to comply with requirements of the next phase.

3. Settling for a Solution not aligned with your business needs

For organizations making a transition from manual system to a system-based invoice generation tool, they may settle for something that is not aligned with their business needs. As an example, a company may have different locations from where each responsible person raises the invoice. The system that an organization get may not have such a feature where a specific person is able to generate invoice only for its designated location.

Another example is the way internal controls are designed within the system. For instance, the system must be flexible enough to enable an invoice approval mechanism or in cases where it is not required or practical, this functionality can be disabled. Same goes with the segregation of duties e.g., in functions like product creation, price setting, invoice creation and payment posting.

Summing up all this, it is the need of the hour to start taking steps in the right direction in order to comply with the kingdom’s e-invoicing regulations and that too within the stipulated timelines before it is too late.

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