ZATCA is rolling out Phase 2 of e-invoicing — the integration phase — in waves, and each wave reaches smaller businesses than the last. The 25th wave covers taxpayers with taxable turnover above SAR 187,500, with integration due by 1 February 2027. Most guidance focuses on tax rules. This article covers the part that often takes longer: getting your own systems ready.
- — Phase 2 means your invoicing system must connect to ZATCA's Fatoora platform, not just print a compliant invoice.
- — The hard part is usually the data feeding the invoice — customer records, VAT numbers, and invoices created in several places.
- — Start by listing every place an invoice is created today. Each one needs a compliant path.
Phase 1 vs Phase 2 in plain words
Phase 1 required businesses to generate electronic invoices in a compliant format instead of handwritten or word-processor invoices. Phase 2 goes further: your invoicing solution has to be integrated with ZATCA's Fatoora platform. Standard tax invoices for business customers are cleared by the platform, and simplified invoices for consumers are reported to it. In practice, invoicing stops being a document you produce and becomes a data exchange your systems take part in.
“E-invoicing turns your invoice from a document into a data exchange. Systems that were never built to share clean data feel it first.”
Where businesses get stuck
The integration itself is usually handled by a certified e-invoicing solution or your ERP. Where businesses get stuck is everything around it: invoices raised in a branch system nobody updates, customer records without VAT numbers, credit notes issued by hand, or a custom system the original developer no longer supports. Each of these produces invoices that either fail validation or never reach the integrated solution at all.
Map every invoicing source
Before choosing tools, list every place an invoice or credit note is created in your business: the main ERP or accounting software, any custom or industry-specific system, branch or field tools, e-commerce platforms, and anything still done in spreadsheets. For each one, write down who uses it, how many invoices it produces, and whether it can connect to your chosen e-invoicing solution. That list is your real project plan.
Fix the data, then connect it
Clean customer master data first — legal names, addresses and VAT registration numbers — because errors there cause rejected invoices later. Then connect each invoicing source to your e-invoicing solution with proper error handling, so a rejected invoice is flagged to someone immediately instead of silently failing. Finally, retire manual invoicing paths wherever you can. Every spreadsheet invoice is a future compliance problem.
- ✓We know every system that creates invoices or credit notes
- ✓Customer VAT numbers and addresses are complete and correct
- ✓Each invoicing source can connect to our e-invoicing solution
- ✓Rejected invoices alert a named person automatically
- ✓We've confirmed our wave and deadline with our tax adviser
Conclusion
Phase 2 is a tax obligation, but it lands as a systems project. Businesses that map their invoicing sources and clean their data early get through it calmly. Those that start from the deadline usually find out how many places invoices really come from.