ZATCA E-Invoicing Readiness: Phase 2 Waves, Requirements and How Your Ledger Fits In

ZATCA e-invoicing readiness means having an invoicing solution that can generate, stamp and transmit invoices in the format the Zakat, Tax and Customs Authority (ZATCA) requires, and an accounting process that keeps the general ledger in step with what was cleared or reported. Most of the technical work sits in the invoicing system. The accounting work is about master data, VAT accounts and reconciliation.

This guide explains both phases, the wave timetable up to 2027, what a compliant invoice contains, and a readiness checklist. It also says plainly what Ledgeriano does and does not do, so you can plan the right architecture.

General information, not tax advice. Dates and thresholds were checked against ZATCA announcements as reported by EY in August 2026, as of November 2026. ZATCA notifies each taxpayer in scope directly, and its e-invoicing portal is the authority. Confirm your wave and technical requirements there or with a tax adviser.

#ZATCA e-invoicing at a glance

Sources: EY Global Tax News, Saudi Arabia announces 25th wave of Phase 2 e-invoicing integration (10 August 2026), and ZATCA's e-invoicing portal.

#What is ZATCA e-invoicing?

ZATCA e-invoicing (branded FATOORAH) is Saudi Arabia's mandatory electronic invoicing system for VAT. Invoices, credit notes and debit notes must be issued as structured electronic documents by a compliant solution, never by hand or as an editable file. Paper or a Word template is not an e-invoice, and neither is a PDF on its own.

The goal is real-time visibility: ZATCA sees B2B invoices before the buyer does and B2C invoices within a day, which makes VAT gaps much harder to hide and gives honest businesses fewer audit queries.

#What are Phase 1 and Phase 2?

Phase 1 is about generating invoices electronically; Phase 2 is about integrating with ZATCA so each invoice is checked or reported.

#Which wave am I in?

Your wave depends on your VAT-able revenue (excluding VAT) in the reference years ZATCA names for each wave. The thresholds have fallen steadily, from SAR 3 billion in the first wave to SAR 187,500 in Wave 25. The three most recent waves, as reported by EY:

Wave 25 is the first to use 2025 revenue, so a business that crossed SAR 187,500 only last year can still be in scope. Taxpayers below the threshold should watch for later waves, and every taxpayer should keep its Phase 1 obligations meanwhile.

#Worked example: checking the threshold

A Riyadh design studio had VAT-able revenue (excluding VAT) of SAR 160,000 in 2023, SAR 172,000 in 2024 and SAR 194,000 in 2025. The 2025 figure is above SAR 187,500, so the studio falls in Wave 25 and must comply by 1 February 2027, even though no earlier year qualified. Its revenue report by year, net of VAT, is the evidence it needs, which is why revenue and VAT should sit in separate accounts.

#What does a compliant e-invoice contain?

A Phase 2 e-invoice is a structured XML document with security features that prove who issued it and that it has not been changed. The invoicing solution produces these elements, not the accountant:

1. UBL 2.1 XML with the mandatory fields (seller and buyer VAT numbers for standard invoices, line details, VAT category and amount per line, totals).
2. A UUID that identifies the invoice globally, plus the sequential invoice number and an invoice counter.
3. A hash of the previous invoice, which chains invoices so a deleted or altered invoice breaks the chain.
4. A cryptographic stamp generated with the certificate (CSID) issued to the onboarded solution.
5. A QR code carrying seller name, VAT number, timestamp, totals, VAT and, in Phase 2, the hash and signature data.
6. Clearance or reporting: standard invoices go to FATOORAH for clearance and are only valid once ZATCA returns them stamped; simplified invoices are reported within 24 hours of issue.

#Standard vs simplified tax invoice

A standard tax invoice is issued to a business (or anyone who asks for one to claim input VAT) and must show the buyer's details; under Phase 2 it is cleared before it is shared. A simplified tax invoice is issued for B2C sales, such as a retail receipt, and is reported after issue. Credit and debit notes follow the type of the original invoice.

#Who does what: invoicing solution, ledger and team

E-invoicing compliance belongs to the invoicing solution, while the general ledger records the accounting consequences. Keeping that split clear avoids buying the wrong tool.

#What Ledgeriano does and does not do

Ledgeriano is a multi-entity general ledger with an optional inventory and trade module. It does not integrate with ZATCA, does not onboard devices or hold a CSID, and does not generate e-invoices that meet Phase 1 or Phase 2 requirements. Its own sales invoices are internal accounting documents, so a business in Saudi Arabia must issue its customer invoices from a ZATCA compliant solution.

What Ledgeriano does well in this setup:

• Keeps the books of each company on the GCC IFRS chart, with input VAT, output VAT, reverse charge VAT, a VAT settlement account and Zakat payable already in place (see the chart of accounts guide).
• Receives postings through its REST API. Your invoicing system posts one journal entry per cleared invoice, with the invoice UUID as the Idempotency-Key, so a retried request returns the existing entry instead of creating a duplicate.
• Keeps posted entries immutable and corrections as reversals, with an audit trail, which mirrors how credit notes work in e-invoicing.
• Runs several companies side by side, for groups with a Saudi entity next to UAE or other subsidiaries (multi-entity accounting).
• Supports Zakat accounting, covered in the Zakat accounting guide.

#How should the ledger connect to a compliant invoicing system?

The cleanest pattern is "invoice first, entry second": the invoicing system issues and clears the invoice, then posts the accounting entry using the cleared invoice data. That way the ledger never contains revenue ZATCA has not seen.

Here is the entry a Jeddah distributor's invoicing system posts after ZATCA clears invoice INV-2026-00871 for SAR 40,000 plus 15% VAT (codes from the GCC IFRS template):

curl -X POST https://api.ledgeriano.com/api/v1/journal-entries \
  -H "Authorization: Bearer $LEDGERIANO_API_KEY" \
  -H "Content-Type: application/json" \
  -H "Idempotency-Key: 3f0c9d2e-7a41-4c3b-9b8e-0d5a6f2c1e77" \
  -d '{
    "entry_date": "2026-11-03",
    "voucher_type": "SAL",
    "reference": "INV-2026-00871",
    "description": "Cleared standard tax invoice INV-2026-00871",
    "status": "posted",
    "lines": [
      { "account_code": "110201", "party_code": "C014", "debit": 46000 },
      { "account_code": "410101", "credit": 40000 },
      { "account_code": "210301", "credit": 6000 }
    ]
  }'

Rules that keep this robust:

• Post only cleared or reported invoices. A rejected standard invoice must not reach the ledger.
• Use the UUID as the idempotency key and the invoice number as the reference, so both are searchable.
• Post credit notes as new entries that reverse the revenue and VAT, never as edits.
• Reconcile monthly: the total VAT on cleared and reported invoices for the month must equal the movement on output VAT payable.

#ZATCA e-invoicing readiness checklist

Use this list six months before your integration date (ZATCA's minimum notice period):

1. Confirm your wave from your revenue by year and ZATCA's notification.
2. Choose a compliant solution: an ERP, POS or invoicing platform that supports Phase 2, or a certified integration layer in front of your current system.
3. Clean master data: customer VAT numbers, commercial registration numbers, addresses and item VAT categories.
4. Map invoice types: which sales produce standard invoices and which produce simplified ones, plus credit and debit notes.
5. Onboard every device or system that issues invoices on the FATOORAH portal and store the certificates securely.
6. Test in the sandbox, including rejections, credit notes and offline scenarios.
7. Connect the ledger: map invoice fields to accounts, parties and cost centers, and post via API with idempotency keys.
8. Set a reconciliation routine between cleared invoices and output VAT, and include it in your month-end close checklist.
9. Train staff to correct with credit notes, never by deleting or reissuing.

#Common e-invoicing readiness mistakes

• Assuming the accounting software handles compliance. Check whether it is a compliant invoicing solution or only a ledger.
• Letting two systems issue invoices for the same sales stream, which breaks numbering and the hash chain.
• Posting revenue from sales orders instead of cleared invoices, so the ledger and ZATCA disagree.
• Ignoring simplified invoices. B2C reporting within 24 hours applies to every till and online checkout.
• Leaving VAT numbers incomplete in the customer master, which causes clearance rejections.