A detailed and in-depth guide on setting up the e-invoicing module in Wafeq for Saudi companies.

Electronic invoicing (e-invoicing) represents a significant digital transformation in Saudi Arabia's tax administration system. As part of the Kingdom's Vision 2030 initiatives and the broader efforts by the Zakat, Tax and Customs Authority (ZATCA), e-invoicing has become mandatory for all taxable entities operating in Saudi Arabia. This comprehensive guide provides detailed instructions on implementing e-invoicing through Wafeq, a leading financial management platform tailored for businesses in the Middle East.

The implementation of e-invoicing in Saudi Arabia occurs in two phases: the Generation Phase, which began on December 4, 2021, requiring businesses to generate and store tax invoices electronically; and the Integration Phase, which commenced on January 1, 2023, requiring businesses to transmit their invoices in real-time to ZATCA systems. This guide will walk you through the entire process of setting up and maintaining compliance with these requirements using Wafeq's specialized e-invoicing module.

Overview of E-Invoicing in Saudi Arabia

E-invoicing (Fatoorah) in Saudi Arabia is governed by regulations issued by ZATCA under the VAT legislation. These regulations mandate that all taxable persons must:

1. Generate tax invoices electronically using compliant systems.
2. Store invoices digitally in specified formats.
3. Transmit invoice data to ZATCA in real-time.
4. Include specific QR codes on simplified tax invoices.
5. Apply cryptographic stamping to standard tax invoices.

The Saudi e-invoicing system serves multiple purposes, such as reducing tax evasion and the shadow economy, streamlining business transactions and reducing paper usage, enhancing transparency in commercial transactions, standardizing invoice formats for better data analysis, and enabling real-time reporting and monitoring of economic activities.

Non-compliance with e-invoicing regulations can result in significant penalties, including fines up to SAR 100,000, suspension of government services, and other business disruptions. Therefore, selecting a reliable e-invoicing solution like Wafeq is crucial for Saudi businesses to maintain compliance while optimizing their financial operations.

Why Use Wafeq for E-Invoicing

Wafeq stands out as an ideal solution for Saudi businesses implementing e-invoicing for several compelling reasons:

• Localized Compliance Wafeq is specifically designed with Saudi regulations in mind, ensuring full compliance with ZATCA's e-invoicing requirements, including cryptographic stamping, QR code generation, and proper XML formatting for both simplified and standard tax invoices.
• Seamless Integration The platform integrates effortlessly with existing business operations, allowing automated invoice generation from sales orders, purchase orders, and other business documents without disrupting established workflows.
• Arabic Support Unlike many international solutions, Wafeq provides comprehensive Arabic language support, enabling businesses to generate bilingual invoices that meet local requirements while serving international clients.
• Cloud-Based Solution As a cloud-based platform, Wafeq eliminates the need for complex on-premises infrastructure, reducing implementation costs while ensuring accessibility from anywhere with internet connectivity.
• Comprehensive Financial Management Beyond e-invoicing, Wafeq offers complete financial management capabilities, including accounting, inventory management, and financial reporting, providing a unified platform for business operations.
• Dedicated Support Wafeq provides specialized support for Saudi businesses, with local expertise in tax regulations and Arabic-speaking customer service representatives who understand the unique Saudi market challenges.

Part 1:Prerequisites Before Setup

Before commencing the e-invoicing setup process in Wafeq, ensure your business has completed the following prerequisites:

1. Valid Commercial Registration (CR) with the Ministry of Commerce
2. Active VAT Registration with ZATCA (15-digit Tax Identification Number)
3. Registration in the e-invoicing portal (FATOORA) on ZATCA's website

Part 2: Step-by-Step Setup in Wafeq

Follow these detailed steps to implement e-invoicing in Wafeq:

1. Press on the organization's name.
2. Navigate to Settings from Company Profile.
3. Scroll down to Fatoorah's Platform Settings, then click Connect.



Part 3: Field Preparation and Technical Requirements

Proper field preparation ensures smooth e-invoicing operations:

• Company name in English- Arabic.
• ID Type and Number.
• Industry.
• Complete address with postal code.
• Effective registration date and First filing due date.
• Contact information.
• 
  



Also Read: Connecting to Fatoora Portal.

Part 4: Issuing Electronic Invoices from Wafeq

Once your setup is complete, follow these steps to issue compliant e-invoices:

• Ensure you enter your Tax Registration Number and Unique Identity Number (TIN) from your facility settings to be able to issue a tax invoice approved by the Authority directly.



• Navigate to Sales, then click Sales Invoices.
• Then click Create On the top left of the page to bring a tax sales invoice approved by ZATCA.
• Now you can create a comprehensive tax invoice approved by the Authority by filling out all required invoice fields, then clicking Report and Send.





Part 5: Continuous Compliance

Maintaining ongoing compliance requires regular attention to system updates, Compliance Monitoring, and Audit Preparation. So you need to maintain documentation of all system configurations and generate monthly compliance reports.

Know more: The Hassle-Free Way to VAT Submission.

Implementing e-invoicing through Wafeq provides Saudi businesses with a comprehensive solution to meet ZATCA's regulatory requirements while streamlining financial operations. By following this guide, companies can ensure smooth adoption of e-invoicing, avoid compliance penalties, and leverage digital transformation to enhance business efficiency.

The shift to e-invoicing represents more than just regulatory compliance—it's an opportunity to modernize business processes, improve data accuracy, and gain better financial insights. With Wafeq's specialized platform, Saudi businesses can confidently navigate this transition while positioning themselves for future growth in the Kingdom's evolving digital economy.

Remember that e-invoicing regulations continue to evolve, and staying informed about updates from ZATCA is essential. Wafeq's regular system updates and compliance notifications help ensure your business remains aligned with the latest requirements, allowing you to focus on your core operations while maintaining seamless tax compliance.