How to Integrate Multiple ERP/ POS Systems with Fatoora Portal to Generate Phase 2 Complaint e-Invoices?

The Kingdom of Saudi Arabia (KSA) planned to implement e-invoicing in two phases through Zakat, Tax and Customs Authority (ZATCA). e-Invoicing applies to all resident taxpayers except non-residents for VAT purposes.

Accordingly, ZATCA implemented phase 1 of e-invoicing in Saudi Arabia on 4th December 2021. Also, ZATCA announced the implementation of phase 2, that businesses with a turnover of more than SAR 3 billion in 2021 must implement phase 2 from 1st January 2023.

Understanding the phase 2 regulations is important for taxpayers to comply with phase 2 . i.e., the integration phase. Under phase 2, the businesses must integrate their POS/ accounting systems with the Authority’s system for ‘Clearance’ of tax invoices and related Credit and Debit Notes (CDNs) and ‘Reporting’ of simplified tax invoices and related CDNs.

This article explains how a taxpayer can integrate with the Fatoora portal as the phase 2 implementation date is approaching.

Points to be considered before choosing the integration mode

You should keep the following points in mind while choosing the integration mode:

1. Internet connectivity availability – Stable or not
2. Type of e-invoices to be generated
3. The volume of invoices, especially during the peak/festive season
4. The architecture of ERPs and POS system 
5. Organisation network security policies
6. Number of servers and database architecture
7. Number of VAT registrations

Types of integrations available under phase 2 of ZATCA e-invoicing

The following are the types of integrations available for businesses to comply with phase 2 of e-invoicing in Saudi Arabia:

• Direct API integration with ERP: You can integrate multiple ERP/POS units with ‘Restful’ APIs.
• SFTP-based integration: You can implement secure file sharing via SFTP between your system and e-invoice solution cloud servers.
• DB-based integration: Your systems will be integrated with intermediate databases with bespoke data mapping.
• POS integration: You can integrate POS systems directly with ZATCA to generate XML and QR codes.
• Excel upload: You can create e-invoices in bulk by uploading data via customised Excel templates prepared by your order management systems.
• UI-based e-invoicing: The web UI interface lets you create an invoice easily from scratch and then convert it to an e-invoice in a single click.

Step-by-Step Process to integrate with ZATCA in case of multiple ERP and POS systems?

It is challenging to integrate with ZATCA in case you have multiple ERP/ POS systems across multiple businesses, such as B2B, e-commerce, and retail businesses. It is virtually impossible to have separate e-invoicing solutions for each business or each ERP/POS due to integration costs, complexity and other reasons. Hence, adopting one unique solution, such as ClearTax e-Invoicing software, can help you easily integrate with ZATCA to comply with phase 2 of e-invoicing in Saudi Arabia.

You must follow the below steps to easily integrate multiple ERP/POS systems with ZATCA:

Step 1: Identify all the ERP, custom billing solutions, cash registers and cloud-based POS systems across all your business units, such as B2B, retail and e-commerce.

Step 2: Register the requisite number of devices that will ensure seamless interaction with ZATCA across all your business units

Step 3: Share the invoice data from all the identified ERP/POS systems with the ‘ClearTax Cloud Platform’ that comes with the below features:

• Data validation
• e-Invoice data enrichment
• ZATCA interaction
• Invoice generation in PDF/A-3 format
• Digital invoice exchange
• Archival of e-invoices

Step 4: ‘ClearTax Cloud Platform’ generates XML as per the ZATCA specifications and shares the same with the Fatoora portal for ‘Clearance’ in case of standard tax invoices or related CDNs and ‘Reporting’ in case of simplified tax invoices or related CDNs.

Step 5: Fatoora portal validates the invoice based on the type of invoice and returns it with a cryptographic stamp and QR code, wherever applicable.

Step 6: ‘ClearTax Cloud Platform’, in return, shares the invoices in PDF/A-3 format with all the connected ERP/POS systems for further use.