ZATCA-Compliant ERP in Riyadh: The 2026 Phase 2 Integration Guide
Wave 24 lowers the e-invoicing threshold to SAR 375,000, pulling thousands of Saudi businesses into mandatory Phase 2 by 30 June 2026. Here's what compliance really requires, and how to choose an ERP that delivers it.
As Saudi Arabia's business landscape accelerates under Vision 2030, ZATCA's e-invoicing mandate has moved decisively from generating invoices to integrating them. For decision-makers searching for a ZATCA-compliant ERP in Riyadh, the question is no longer whether to comply. It's whether your system can clear an invoice with the Fatoora platform in real time, before your deadline.
Key takeaways
- A ZATCA-compliant ERP generates structured XML invoices, applies a cryptographic stamp and digital signature, and connects directly to ZATCA's Fatoora platform.
- Wave 24 applies to businesses with taxable turnover above SAR 375,000, the lowest threshold yet, with a 30 June 2026 integration deadline.
- B2B invoices require real-time clearance before they can be shared; B2C invoices must be reported within 24 hours.
- Most existing ERPs can be made compliant through integration, not replacement, if they support API connectivity and compliant document generation.
Wave 24 deadline: 30 June 2026
If your business exceeded SAR 375,000 in VAT-taxable revenue, you are likely in scope, and integration with the Fatoora platform is not something that can be completed in a weekend. Onboarding alone moves through certificate generation, sandbox testing, and production go-live.
What does ZATCA Phase 2 actually require?
ZATCA rolled out e-invoicing in two phases. Phase 1, the Generation phase, simply required businesses to create and store invoices through a compliant electronic system. Phase 2, the Integration phase, is where the technical bar rises: your system must connect directly to ZATCA's Fatoora platform and exchange invoices with it programmatically.
Phase 2 is being enforced in waves, grouped by annual turnover. Each successive wave reaches smaller businesses, and Wave 24 reaches further down than any before it.
Are you in scope? Wave 23 vs Wave 24
ZATCA notifies affected taxpayers ahead of their deadline, but waiting for that notification before preparing is a risk. The integration work has to happen on your side regardless. Two waves define 2026:
- Wave 23: businesses with taxable turnover above SAR 750,000; integration deadline 31 March 2026 (now passed).
- Wave 24: businesses with taxable turnover above SAR 375,000; integration deadline 30 June 2026. This is the first time the mandate has reached this far into the SME segment.
If you're unsure which wave applies, the determining factor is your VAT-taxable revenue in the relevant reference years, not your current headcount or sector.
Standard vs Simplified invoices: what’s the difference?
One of the most common compliance gaps is treating all invoices the same. Phase 2 defines two transaction types, each with its own ZATCA workflow, and your ERP must handle both.
| Standard (B2B / B2G) | Simplified (B2C) | |
|---|---|---|
| Used for | Business-to-business and business-to-government sales | Sales to individual consumers |
| ZATCA workflow | Clearance, sent to ZATCA in real time | Reporting, submitted after issuance |
| Timing | Cleared before the invoice is shared with the buyer | Reported within 24 hours of issuance |
| Buyer VAT number | Required | Not required |
| QR code | Included | Mandatory, with cryptographic stamp |
An ERP that can only generate invoices but cannot clear a B2B document in real time will leave you non-compliant on every business sale, regardless of how polished the rest of the system is.
What makes an ERP genuinely "ZATCA-compliant"?
"ZATCA-ready" is a label many platforms claim and fewer fully deliver. Use this five-point readiness test to separate marketing from capability before you commit.
- Real-time Fatoora integrationDirect API connectivity to ZATCA's platform for both clearance (B2B) and reporting (B2C), not a manual upload step.
- Compliant document generationStructured XML (UBL 2.1) and PDF/A-3 with embedded XML, including the mandated UUID, invoice counter (ICV) and previous-invoice hash (PIH).
- Cryptographic integrityDigital signature, cryptographic stamp and a compliant QR code on every invoice, with anti-tampering and sequential numbering.
- Arabic & SAR by defaultMandatory fields rendered in Arabic, with VAT amounts shown in Saudi Riyals: built in, not bolted on.
- Secure archiving & audit trailTamper-resistant storage of every invoice for the full retention period, retrievable for audit at any time.
Beyond these five, onboarding itself is a process: generating a certificate signing request, validating your invoice structures in ZATCA's sandbox, then moving to production. Building that runway into your timeline is what separates a smooth go-live from a last-minute scramble.
Beyond compliance: what else does a ZATCA-ready ERP deliver?
Compliance is the floor, not the ceiling. Disconnected tools create friction, limit visibility, and slow execution. The same integration work that connects you to Fatoora is an opportunity to unify data across finance, operations and reporting, turning a regulatory deadline into a genuine upgrade in operational control.
This is where AI changes the equation. AI creates value only when it is connected to real business operations, and an ERP that already centralises your transactional data is the natural place to embed it. At Watan First Solutions, our approach is to build scalable, secure ERP environments with local compliance readiness, including ZATCA, designed in from the start, then to layer AI-integrated capabilities that improve forecasting, visibility and decision support on top of that connected foundation.
From regulatory obligation to operational advantage. Compliance is the moment to build the system you actually needed.
How we approach ZATCA-ready ERP projects
We don't start with software; we start with your operational reality. Our delivery model moves from understanding the business to a compliant, scalable system:
- Discover: assess your current invoicing workflows, ERP capabilities and Phase 2 exposure.
- Define & Design: shape the integration path: upgrade in place, or migrate where legacy systems can't support API connectivity.
- Build & Integrate: implement compliant generation, clearance and reporting, connected to Fatoora.
- Enable & Improve: onboard your team, confirm production go-live, and refine as ZATCA's requirements evolve.
Frequently asked questions
What is a ZATCA-compliant ERP?
A ZATCA-compliant ERP is an enterprise system that generates structured XML invoices, applies a cryptographic stamp and digital signature, and integrates directly with ZATCA's Fatoora platform, clearing B2B invoices in real time and reporting B2C invoices within 24 hours, in line with Phase 2 of Saudi Arabia's e-invoicing mandate.
What is the ZATCA Phase 2 Wave 24 deadline?
Wave 24 applies to resident VAT-registered businesses with taxable turnover above SAR 375,000. Affected businesses must integrate with the Fatoora platform by 30 June 2026: the lowest threshold yet, bringing thousands of SMEs into mandatory Phase 2 scope for the first time.
What's the difference between Phase 1 and Phase 2?
Phase 1 (Generation) required businesses to create and store electronic invoices using a compliant system. Phase 2 (Integration) requires those systems to connect directly to ZATCA's Fatoora platform, transmitting B2B invoices in real time for clearance and reporting B2C invoices within 24 hours.
Does a ZATCA-compliant invoice have to be in Arabic?
Yes. ZATCA requires invoices to contain mandatory fields in Arabic, with the VAT amount displayed in Saudi Riyals. English can appear alongside Arabic, but Arabic is required.
Can our existing ERP be made compliant, or do we need a new one?
Many existing ERPs can be made compliant through integration rather than replacement: by adding Fatoora API connectivity, compliant XML generation, cryptographic stamping and secure archiving. Legacy systems without API capability may need upgrading. A readiness assessment determines the right path for your business.
Don't wait for the notification
If Wave 24 applies to you, the time to assess your ERP is now. Let's map your Phase 2 readiness and the fastest compliant path to go-live.
Book a ZATCA readiness assessment