ZATCA Phase 2 E-Invoicing Software for Saudi Arabia (2026 Guide)

If your business operates in Saudi Arabia, ZATCA Phase 2 (the Integration phase of the FATOORA e-invoicing programme) is no longer a future concern — it is rolling out in waves right now, and the revenue thresholds step down with every wave. Choosing the right e-invoicing software is one of the most consequential compliance decisions a Saudi business will make this year. This 2026 guide explains what Phase 2 integration actually requires, how to evaluate a solution, and gives an honest, fair view of the options — including Xrero (اكسريرو), our own cloud ERP and accounting platform.

One quick clarification: Xrero is not Xero. We are a separate, Dubai-based product serving the UAE and Saudi Arabia; Xero is a different company entirely.

Key takeaway: ZATCA Phase 2 requires your software to integrate directly with the Fatoora platform — generating signed XML invoices with a cryptographic stamp, UUID, QR code and sequential numbering, then either clearing standard (B2B) invoices in real time or reporting simplified (B2C) invoices within 24 hours. ZATCA does not issue a binding vendor "certification" that makes any software officially "ZATCA certified" — compliance is the taxpayer's obligation. Choose a tool that genuinely supports the full Phase-2 flow, and verify the current wave and rules at zatca.gov.sa.

What is ZATCA Phase 2, and who does it affect?

Saudi Arabia's e-invoicing programme, FATOORA, has two phases. Phase 1 (the Generation phase) started on 4 December 2021 and applies to all resident taxpayers: you must generate and store compliant electronic invoices (structured XML, or PDF/A-3 with embedded XML) containing required fields such as the seller name, VAT registration number, timestamp and totals. There is no real-time link to ZATCA in Phase 1.

Phase 2 (the Integration phase) began rolling out in waves from 1 January 2023. This is the phase that demands software integration. ZATCA targets taxpayers group by group, by revenue threshold, and gives each group at least six months' advance notice of its go-live date. As of mid-2026:

• Wave 23 — integration deadline 31 March 2026, for taxpayers whose VAT-subject revenue exceeded SAR 750,000 in 2022, 2023 or 2024.
• Wave 24 — integration deadline 30 June 2026, for taxpayers whose revenue exceeded SAR 375,000 in 2022, 2023 or 2024.

The thresholds step down with each wave, progressively catching smaller businesses. Because new waves are announced periodically, treat the "latest wave" as a moving target and confirm your own wave on ZATCA's official page.

What Phase 2 integration technically requires

Phase 2 is materially more demanding than Phase 1. Your e-invoicing solution must be able to:

• Integrate via API with ZATCA's Fatoora platform — connecting your invoicing system (EGS, or e-invoice generation solution) to ZATCA directly.
• Onboard each device/solution through ZATCA's developer portal, generating a CSR and obtaining a cryptographic stamp identity (CSID).
• Produce a compliant XML invoice carrying a cryptographic stamp (digital signature), a UUID, a QR code and sequential numbering with a hash chain (each invoice references the previous one).
• Handle the two submission models correctly — described below.

Clearance vs reporting — get this right

This distinction trips up many buyers, so it is worth being precise:

• Standard (B2B) tax invoices require real-time clearance. The invoice is submitted to ZATCA, which clears it and applies its cryptographic stamp. The invoice is legally valid only after clearance.
• Simplified (B2C) invoices are reported within 24 hours of issuance. They are delivered to the customer immediately, then transmitted to ZATCA within a 24-hour window.

Some secondary write-ups loosely invert this. The accurate model is: clearance = standard/B2B, reporting within 24 hours = simplified/B2C. If a vendor's marketing gets this backwards, treat it as a warning sign.

The "certified" myth — and how to read vendor claims

You will see software marketed as "ZATCA certified" or "معتمد من هيئة الزكاة". Read these claims carefully. ZATCA publishes an indicative list of solution providers that have passed its qualification process, but it explicitly states that a taxpayer is considered compliant if they meet e-invoicing requirements even if their provider is not on that list. There is no binding government certification that makes a vendor officially "ZATCA certified", and compliance ultimately attaches to you, the taxpayer — verified through ZATCA's Compliance & Enablement Toolbox and developer onboarding.

For that reason, Xrero describes itself as offering ZATCA Phase-2 support — helping you produce ZATCA-compliant e-invoices — and never as "ZATCA certified". When you see a competitor make the "certified" claim, understand it as the vendor's own marketing language rather than a guaranteed regulatory status.

How to choose a ZATCA Phase 2 solution

Use this checklist when evaluating any tool:

• Full Phase-2 flow. Does it actually onboard devices, sign invoices, generate the UUID/QR/hash chain, and both clear B2B and report B2C correctly?
• Native Arabic + English. Bilingual invoices and a bilingual interface for your team.
• Saudi VAT 15%. Correct VAT handling, including zero-rated and exempt supplies, and 15% as standard.
• Resilience. Retry logic, transmission logs, and a clear audit trail when ZATCA is briefly unreachable.
• Sandbox first. A proper sandbox/onboarding path before you go live in production.
• Scope fit. A standalone e-invoicing add-on may be enough; a growing business may prefer a full ERP that also runs accounting, inventory and sales.

Honest comparison of ZATCA Phase 2 options (2026)

A fair word on pricing models: Xrero is priced per user per month, while Qoyod and Daftra price by plan/feature tier (with user caps) and QuickBooks prices per company plan in USD. The cheapest option on paper depends entirely on your team size — so compare the model, not just the headline number. And to be genuinely fair: if your business is Saudi-only and you simply need a focused, Arabic-first invoicing tool with strong, automated ZATCA e-invoicing, a purpose-built tool like Qoyod may be the better fit than a full ERP.

Where Xrero fits

Xrero is an all-in-one cloud ERP and accounting platform for the UAE and Saudi Arabia, with bilingual Arabic and English throughout. On the Saudi side, Xrero provides ZATCA Phase-2 support: it helps you produce ZATCA-compliant e-invoices (signed XML, QR code, cryptographic stamp, UUID and hash-chained sequential numbering), integrates with the Fatoora platform, and handles both the real-time clearance of standard B2B invoices and the 24-hour reporting of simplified B2C invoices — with a sandbox onboarding path, transmission logs and retry handling for resilience. It applies Saudi VAT at 15% with correct treatment of zero-rated and exempt supplies.

To be clear and honest: Xrero offers ZATCA Phase-2 support — we do not claim to be "ZATCA certified", because no such binding vendor certification exists, and compliance remains your obligation as the taxpayer. Xrero's real advantage is breadth: e-invoicing lives inside a single platform that also runs your accounting, inventory and sales, across both the Saudi and UAE markets, at a transparent AED 99 per user per month after a 15-day free trial.

Frequently asked questions

This is general information, not tax, legal or purchasing advice — verify current details with the vendor and with ZATCA (zatca.gov.sa). For accounting support, see our accountant resources or review Xrero pricing.