ZATCA E-Invoicing Software: The Phase 2 Checks Your Integration Doesn’t Run

ZATCA e-invoicing software issues, signs and clears the invoices you send under Phase 2. It does not check the invoices you receive, so a cleared supplier invoice can still be a duplicate or a price mismatch.

A Financial Controller at a Saudi distributor feels this first. Each wave moves more suppliers into Phase 2, and Wave 25 reaches those above SAR 187,500 by 1 February 2027. Teams assume ZATCA has already checked those invoices, and it has not checked them against your purchase orders.

KlearStack is not issuing software. It is the check layer beside it, running those checks on every supplier invoice before the money moves.

TL;DR

1. Phase 2 clears B2B tax invoices before the buyer receives them, and reports simplified invoices within 24 hours.
2. Wave 24 (above SAR 375,000) and Wave 25 (above SAR 187,500, by February 2027) widen the set of suppliers who clear invoices.
3. Pick issuing software on ERP fit, Fatoora onboarding and rejection handling, because a directory listing is not an approval.
4. Clearance tests an invoice’s form and tax rules, not your order, receipt or earlier payments.
5. A buyer must hold a valid tax invoice to deduct input VAT.
6. The inbound Phase 2 check tests each received invoice for validity and for a match to your records.
7. The 20-Invoice Clearance Gap Test counts cleared invoices that fail your own match.
8. Start by running a month of received invoices through the check.

Check a month of received Phase 2 invoices with KlearStack

What Is Phase 2 of ZATCA E-Invoicing? (Wave 24 and Wave 25)

Phase 2 is the Integration Phase of Saudi e-invoicing. Your e-invoicing solution connects to ZATCA’s Fatoora platform, which clears standard B2B tax invoices before the seller shares them with the buyer. Simplified B2C invoices are shared first and reported to ZATCA within 24 hours.

Phase 1, the Generation Phase, began on 4 December 2021. Phase 2 has been enforceable since 1 January 2023, arrives in waves, and ZATCA notifies each taxpayer at least six months ahead. For the general model, see our explainer on how e-invoicing moves from supplier to buyer.

Wave 24 covered taxpayers with VAT-subject revenue above SAR 375,000, with integration due by 30 June 2026. Wave 25 halves the threshold to SAR 187,500 and adds 2025 revenue. EY reports that ZATCA announced it on 24 July 2026, with integration due by 1 February 2027.

A Head of AP at a buyer should note who carries the fines. Deloitte’s 2021 summary of ZATCA’s violations list gives SAR 5,000 to SAR 50,000 for not issuing or archiving e-invoices. They fall on the issuer, and a buyer’s exposure is input VAT.

What Are the Mandatory Requirements for E-Invoicing?

Saudi e-invoicing requires every tax invoice to be issued electronically, in a structured format, through a compliant solution. Phase 2 adds integration with ZATCA: clearance for B2B invoices and reporting within 24 hours for simplified ones. Each requirement below binds the issuer.

ZATCA’s simplified guide and its tax invoicing guideline set out each row. In ZATCA’s own Phase 2 flow, the buyer’s only listed step is to scan the QR code in the VAT app. A Tax Manager should treat that as a gap, because what the scan misses becomes an invoice discrepancy.

Which Software Is Best for ZATCA E-Invoicing?

The best ZATCA e-invoicing software is the one your finance team can run without exceptions. It connects to the system where invoices are created, onboards through Fatoora, submits B2B invoices for real-time clearance and handles rejections, credit notes and archiving. No product wins for every business, so choose one that fits and test before your wave date.

Put six questions to every vendor:

1. Does it connect to the system where your invoices are created?
2. When ZATCA rejects an invoice, can your team fix and resend it without breaking the sequence?
3. Does it handle B2B clearance and 24-hour reporting for simplified invoices?
4. Do its credit and debit notes cite the serial number of the invoice they amend?
5. Does it keep an archive and a user log, and block deletion of issued invoices?
6. Will the vendor test with you before your wave date?

Notice what this list leaves out: every question concerns invoices you send. The three pages we read for this keyword, from Thomson Reuters, Singleclic and ClearTax, never mention checking supplier invoices you receive.

A Head of Shared Services can add one column to the shortlist: what happens to invoices that arrive. KlearStack does not issue, sign or clear invoices, and our guide to invoice processing software compares the receiving side.

How to Check Whether Your Software Is ZATCA-Approved

The nearest thing to an approved list is ZATCA’s solution provider directory, and it states that a listing is not an approval of the solution. So you check compliance by testing: onboard the solution, push test invoices through clearance, and confirm it blocks what ZATCA prohibits.

Five checks give you evidence instead of a vendor’s word:

• Find the provider in the directory, then ask for proof of Phase 2 onboarding on a live taxpayer account.
• Onboard it yourself: log in to Fatoora, onboard a device, generate a one-time password and enter it in the solution.
• Send test B2B invoices and confirm each returns cleared with the ZATCA QR code before it reaches the customer.
• Ask what it blocks: deleted invoices, multiple sequences, changed system time, an exported stamping key and anonymous access.
• Do all of this before your wave date, as ZATCA’s guide advises.

A Financial Controller should keep the results. An audit trail of the onboarding tests is what you show your auditor.

The Inbound Phase 2 Check: Supplier Invoices You Receive

Inbound Phase 2 check (definition)

An inbound Phase 2 check is the test a buyer runs on every supplier invoice received under Phase 2. It confirms the invoice is a valid tax invoice for input VAT. It then compares the invoice with the buyer’s own purchase order, goods receipt and payment history, which clearance does not examine.

A scan in the VAT app shows what one QR code says. It does not tell you whether to pay.

The pattern we see in AP teams meeting a new e-invoicing mandate is that the project lands on the issuing side. Nobody owns the received invoice until a duplicate or a mismatch surfaces at month-end.

A Head of AP can run five steps on every invoice that arrives:

1. Sort what arrived. Standard invoices were cleared by ZATCA. Simplified invoices were reported after they reached you. Phase 1 invoices from suppliers not yet in a wave were never cleared. Scans, handwritten invoices and non-resident suppliers’ invoices sit outside the flow.
2. Confirm it is a valid tax invoice. ZATCA’s input tax guideline makes one the condition for deducting input VAT. ZATCA may accept alternative evidence, but it says to seek a valid invoice in all cases.
3. Match it to your own records: the purchase order, goods receipt and agreed price, which is the three-way match applied to a cleared invoice.
4. Test it against history: same supplier and number, same amount, or the same supply under a new number. ZATCA’s guideline says a tax invoice is issued once and its date may not be amended, so a re-dated invoice is a question.
5. Test the file itself. A QR code on a PDF shows what was encoded when it was made. It does not stop someone editing the amount or bank details beside it.

Route each exception to a named approver and keep every result. That is the audit trail your auditor will ask for.

KlearStack runs steps 3 to 5 through its AP Invoice Compliance AI Agent, in the Supply Chain Document Compliance lane. It reads invoices from your inbox, shared folder or secure FTP, with no fixed template, and compares each with its purchase order and goods receipt. It flags invoices already received, checks the tax billed against your allowed rates, and runs more than 10 forensic checks.

KlearStack takes the drudgery of matching; your team keeps the judgment and the final decision, and your payment run stays yours.

A sample finds the invoices you happened to pull. ACFE’s 2026 study of 2,402 occupational fraud cases found a median loss of $104,000 per case. A check that runs on every invoice does not depend on which ones were pulled.

See which cleared invoices fail your purchase-order match

Errors That Pass Clearance but Still Break Your Books

Clearance tests an invoice against ZATCA’s technical and tax rules. ZATCA holds none of your purchase orders, goods receipts or earlier payments, so five kinds of error pass clearance and still reach your ledger. The table shows why each one slips through and which check stops it.

A Head of Internal Audit will see the common thread: each check compares the invoice with something only you hold. Our guides to duplicate invoice tools and fake invoice detection apply to cleared invoices too.

The Assumption Is That a Cleared Invoice Is a Checked Invoice

The assumption is that supplier clearance covers the receiving side, because ZATCA has already looked at every invoice. The reality is that ZATCA checked each invoice against ZATCA’s rules. Nobody checked it against yours.

The pattern across audit cycles is that a buyer-side sample rarely finds a missing invoice. It finds an approved invoice that nobody compared with the order.

The 20-Invoice Clearance Gap Test

To find your own gap, run this test on last month’s cleared invoices. It needs no software, only your purchase orders and your ledger.

1. Pull 20 cleared standard invoices from at least five suppliers.
2. Find the purchase order and goods receipt for each. Mark any invoice with no order, or with a price or quantity outside your threshold.
3. Search your ledger for an earlier invoice from the same supplier with the same amount or the same supply. Mark any hit.
4. Compare the VAT shown with the rate your rules allow for that supply. Mark any difference.
5. Count the marked invoices.

Every marked invoice is a clearance gap: an invoice ZATCA passed and your own rules would not. The sentence to keep: clearance says an invoice is valid for tax, and only your own match says it is valid for payment.

Before the check, a cleared invoice is approved on the strength of its QR code. After it, the invoice is approved on its match, with the result logged.

Where This Check Does Not Help

If a few suppliers send a few invoices a month and someone who knows each order approves them, a spreadsheet is enough. To verify a ZATCA QR code, use ZATCA’s VAT app. These checks test an invoice against your records and the file itself.

Start any pilot on your own supplier invoices, in the layouts and languages your suppliers send, and judge the checks on those.

Conclusion

ZATCA e-invoicing software gets your outgoing invoices cleared, and it does nothing for the invoices that arrive. A cleared invoice is valid for tax, not yet for payment. The inbound Phase 2 check closes that gap.

The cost of skipping it is not a fine, because fines fall on the issuer. Take an illustrative SAR 20 million of annual purchases carrying 15% VAT. SAR 3 million of input tax rests on supplier invoices, and a valid tax invoice is the condition for deducting it.

At APQC’s 1.5% median, SAR 300,000 of those purchases also go out as duplicate or erroneous payments. The job at risk is the one that approved an invoice because it carried a ZATCA QR code.

Run last month’s supplier invoices through the 30-minute pilot

FAQs