What ZATCA Means for Freelancers, SMEs, and Large Enterprises

Digital transformation in Saudi Arabia is gaining pace and the ZATCA e-invoicing requirement is one of the most important projects that are affecting the business environment. Launched by the Zakat, Tax and Customs Authority (ZATCA), the e-invoicing rule is supposed to modernize the tax system of the country, enhance transparency and curb fraud in all spheres.

Although a significant part of the discussion has been on large companies, it is necessary to point out that freelancers, SMEs, and enterprises are all affected- albeit differently. Regardless of whether you have one invoice to issue per month or thousands, ZATCA e invoicing software has become a necessity to be able to operate legally and efficiently in the Kingdom.

A brief recap of the ZATCA Mandate:

The ZATCA e-invoicing system is comprised of two major stages:

• Phase 1: Generation Phase
• This phase was effective since December 2021 and all businesses that are registered to VAT were required to create and store their invoices electronically instead of paper invoices.
• Phase 2: The Integration Phase
• Implemented in phases beginning January 2023, this stage requires real-time or near real-time integration of the e-invoicing systems with the Fatoora platform of ZATCA. This makes every invoice be cryptographically stamped and verified prior to its issue.

To adhere to these stages, the certified ZATCA e invoicing software must be used, which does not matter the size of the business.

What This Implies to Freelancers

Freelancers think that e-invoicing requirements are meant to be applied to bigger organizations but this is a misconception. When you are registered as VAT in Saudi Arabia even as one-man company, you are obliged to adhere to ZATCA.

The following is how it impacts you:

• You require software that is able to create XML compliant e-invoices.
• The invoices have to be identified with a unique identifier, QR code, and should be stored electronically.
• Phase 2 is where you should be prepared in case your revenue reaches the level of integration with ZATCA.

QuickDice ERP is a lightweight and low-cost solution to freelancers who need to remain compliant without the need to invest in complex systems. It makes invoice creation easy and auto-formats to ZATCA, and has Arabic/English bilingual capabilities.

What This Implies on SMEs

The ZATCA requirement is a challenge as well as an opportunity to small and medium-sized businesses. Lots of SMEs have been using manual work or simple accounting software that is not ZATCA-compliant.

Factors of consideration on the part of SMEs are:

• Moving to ZATCA compliant software
• Automation of the invoice generation, reporting, and archiving
• Training employees about the usage of the new systems
• Early adoption of a flexible ZATCA e invoicing software by SMEs can help them evade future penalties and enhance operational efficiencies.

QuickDice ERP is SME oriented. It does not only deal with e-invoicing but also integrates inventory, accounting, and customer management-making businesses grow without being non-compliant.

What This Does to Big Business

Businesses usually possess more complicated requirements, such as several departments, branches, and large volumes of invoices. To them, ZATCA compliance is more than their legal requirements but integration, security, and scalability of the system.

The problems of large businesses are:

• Connecting their ERP or POS systems to the Fatoora platform of ZATCA
• Dealing with large amounts of real-time data transfer
• Ensuring ZATCA cybersecurity standards of IT infrastructure

QuickDice ERP has modular architecture, real time API integrations and is cloud scalable to large enterprises. It is enterprise-level encrypted, role-based access, and ZATCA Phase 2-compatible.

The importance of the Right Software

The requirements of ZATCA are not voluntary and the failure to comply with them may lead to:

• Fines and punishment
• Business interruptions
• Problem with audits or public tenders

Selecting the best ZATCA e invoicing software, as a freelancer or big corporation, is the key to remaining compliant with the law, operating efficiently, and growing in the future.

QuickDice ERP can provide a single solution to businesses of all sizes so that every invoice is correct, compliant, and safely sent to ZATCA in real-time.

Final Thoughts

The e-invoicing project of ZATCA is a significant improvement in the digital economy of Saudi Arabia. The compliance requirements might seem daunting at the beginning but the change can be quite beneficial with the automated workflows, improved financial oversight, and improved speed of payments.

Be it as a freelancer making an occasional invoice, a small- or medium-sized enterprise with some significant volumes, or an enterprise that needs to process thousands of invoices every day, QuickDice ERP will be the wise decision to make when it comes to invoicing without any hassle and in the full accordance with ZATCA regulations.