Saudi Arabia’s digital transformation journey, a core pillar of its ambitious Vision 2030, is reshaping the way government operations are conducted. The Kingdom's digital revolution is a powerful tide, and at its heart – you can see the nationwide shift to e-invoicing.
We’re stepping into the era of e-invoicing, wherein ink-stained paper will get replaced with bytes of data. This may sound like another challenge to overcome for SMEs, but it’s also a golden opportunity.
It’s the process of generating invoices electronically which is accurate, secure, and ready for instant validation. With the Wave 22 deadline of November 30, 2025, that will roll out for businesses with revenues over SAR 1.25 million, the question for most of you is not if they should comply, but how?
In this article, we're cutting through the noise to discuss:
What e-invoicing in Saudi Arabia truly means for you.
How to effortlessly make your business ZATCA-ready and audit-proof.
The profound benefits ZATCA's e-invoicing brings to Saudi Arabia's economy and your bottom line.
And most importantly, the hassle-free solution that will help you embrace this transformation with confidence.
Do you know?
The groundwork was laid in December 2020 when ZATCA, formerly known as GAZT, published the e-invoicing regulations outlining the terms, requirements, and conditions related to e-invoices and their associated notes.
What is E-invoicing in Saudi Arabia?
At its core, e-invoicing or "FATOORAH" as it's known in Saudi Arabia, is the digital revolution of your invoices. It's simply the process of creating, sending, and managing invoices in a fully electronic format, replacing the paper trail with seamless data exchange.
The big picture? ZATCA (the Zakat, Tax, and Customs Authority) launched FATOORAH to achieve a few key things:
Boost Efficiency: Say goodbye to manual errors and endless paperwork. E-invoicing streamlines your entire billing process.
Enhance Financial Tracking: Get clearer, more accurate insights into your transactions.
Increase Transparency & Security: Every digital invoice is a secure, verifiable record, improving trust and combating potential fraud.
The e-invoicing mandate applies to all B2B, B2C, and B2G transactions. The ZATCA has set a phased timeline for the mandatory adoption of e-invoicing in the country, which is currently in wave 19.
ZATCA rolled out e-invoicing in two phases:
Phase 1 began on December 4, 2021, for all resident taxpayers and parties issuing invoices on behalf of VAT-registered suppliers.
Phase 2 started on January 1, 2023, requiring integration with ZATCA’s FATOORAH portal and adherence to prescribed formats.
Pro tip: Get your business ZATCA complaint as it has advanced to Wave 22 by mid 2025 with deadlines like November 30, 2025, for smaller SMEs (annual revenues over SAR 1.25 million).
How ZATCA E-invoicing Contributes to Saudi Arabia’s Tax System & Economy?
ZATCA e-invoicing is a cornerstone of Saudi Arabia's Vision 2030, transforming the Kingdom's financial ecosystem. It strengthens the tax system and economy by increasing transparency and enhancing overall tax compliance.
This digital shift significantly improves audit capabilities, making it easier for ZATAK, the tax and customs authority, to verify transactions and prevent fraud. E-invoicing gives the government a clear, immediate view of all business transactions, making it extremely difficult for illegal businesses to hide their activities and evade laws.
For businesses, ZATCA e-invoicing brings inherent benefits, including increased operational efficiency, significant cost savings, reduced errors, and faster payment cycles, advantages that extend beyond mere compliance.
Who is it applicable to?
The e-invoicing regulations apply to two categories of individuals:
All taxpayers subject to value-added tax (VAT) residing in KSA; and
Any party that issues a tax invoice on behalf of a taxpayer who is subject to VAT.
Currently, taxpayers who are not residents of KSA are excluded from the e-invoicing requirement.
How to Make Your Business ZATCA-Proof, Audit-Ready?
Team with one of the trusted Odoo partners (ERP/online integrated solution) as they can be your ZATCA compliance experts. They implement and configure Odoo to meet all Saudi e-invoicing requirements, from technical setup to data formatting.
Let us visualize it from the start - Once a transaction is made, Odoo automatically generates e-invoices in both machine-readable XML and human-readable PDF/A-3 formats. Odoo directly integrates with ZATCA's FATOORAH system to validate and store invoice details. Likewise, it will automate the timely e-invoicing submissions to ZATCA’s FATOORAH system. Again, Odoo will direct e-invoice transmission to buyer systems via the integrated network once validated by ZATCA.
If Saudi businesses don't use Odoo for ZATCA e-invoicing, they typically rely on other ERP systems with compliant modules or dedicated standalone e-invoicing software. However, these standalone systems can invite challenges like complex integration, data fragmentation, and higher maintenance costs, unlike Odoo's integrated approach within a complete ERP.
Why Odoo for ZATCA-Ready Operations?
Odoo’s ecosystem is purpose-built to sync easily with ZATCA’s regulations. It is an intelligent assistant that abides by the Saudi tax framework completely. Do you generate an invoice? Odoo formats it. Needs a QR code? Odoo adds it. Digital signatures, UUIDs, CSIDs, and all ZATCA essentials are already mapped into Odoo’s module.
And that’s the best part of it. SMEs don’t need to juggle spreadsheets or hire an IT specialist to manage invoices. This innovative ERP & CRM system has intuitive workflows that streamline e-invoices validation and registration across the buyer's end, the seller’s end, and the FATOORAH platform.
Still thinking? Let me point out how and why Odoo is a fantastic fit:
Built-in ZATCA Tools: We’ll make sure you don’t have to wait for long ZATCA integration headaches. We've pre-optimized the ZATCA setup for your Odoo system. We'll implement it quickly, and Odoo will automatically handle all compliant XML files, QR codes, and direct connections to ZATCA's FATOORAH system.
Works for All Businesses: Whether you're in retail, manufacturing, services, or trading, Odoo adapts. Its built-in ZATCA features work across different industries.
Everything in One Place: Odoo brings your whole business together. Your sales, accounting, inventory, and now e-invoicing all live in one system. No more juggling different programs or manually moving data from one system to another.
Clearer Insights, Better Opportunities: Because Odoo combines everything, you get a much clearer, real-time view of your sales, profits, and losses, too. This helps you make faster, smarter decisions, catching issues early and spotting new opportunities.
Less Manual Work: Finally, this compliance engine automates many tasks, from generating invoices to sending them to ZATCA. This means more time on the clock, fewer human errors, and giving your team enough space to focus on strategic work, not paperwork.
Your Expert Partner: Sedin
While Odoo makes ZATCA simpler, getting it set up perfectly for your business takes a thoughtful touch. We fit in exactly there! As official Odoo partners, Sedin helps businesses quickly set up, customize, and get the most out of Odoo, ensuring you're fully ZATCA compliant and ready for growth.
Ready to comply and thrive? Let Sedin Technologies handle your ZATCA transition so you can focus on growth, not government paperwork.
And, for our next take on violation of ZATCA and penalties, stay tuned for part 2.
