Welcome to the era of electronic invoicing, where folding papers turn into sparkling details on glossy screens and traditional magic buttons disappear in front of the charming touches of light rays. It is a revolutionary technology that combines the power of creative writing with the magic of visual impact. It is also an enchanting combination that allows words and images to transform into incredible dimensions as physical rigidity disappears and electronic paper comes alive with a new spirit. In this article, we will explore the world of the electronic invoice and discover its amazing secret, so get ready to soar with us into a new world of imagination and creativity, as we are on the cusp of discovering this world. Follow along with us.
It is a system that aims to transform the process of issuing paper invoices and notices into an electronic process. This system allows the exchange of invoices and debit and credit notices between the seller and the buyer directly electronically, and they are processed in an organized and integrated electronic format.
With the development of technology, increased use of the Internet, and the trend towards digitization, electronic invoicing is a sustainable and effective option for companies and institutions, simplifying and improving the process of issuing invoices and notifications and enhancing efficiency and communication between concerned parties. It is worth noting that it is characterized by several main points, the most important of which are the following:
Instead of using paper, ink, and postage, companies can send invoices and electronic notices via email or dedicated electronic systems, saving on printing, mailing, and distribution costs, which leads to improving work efficiency and reducing overhead costs.
Electronic invoicing allows invoices and notices to be sent immediately without having to wait for them to arrive by traditional mail. Businesses can also receive payments more quickly, as customers can pay through available electronic payment methods.
Thanks to electronic invoices, it becomes easy to track the date of issuance of invoices, monitor their status, and verify their receipt, as companies can generate detailed reports on invoices and payments received. Thus improving account management and reducing late payment periods.
Electronic invoicing relies on encryption and digital signature technologies. To ensure the confidentiality and security of information, it provides mechanisms to verify the identity of the sender and recipient and to ensure that documents are not modified during transfer.
An electronic invoice enhances the company's image and credibility, as invoices and notices can be professionally customized, company logos and contact information can be added, and templates can be easily modified and adapted according to the company's needs.
The application of the electronic invoice usually takes place through several stages aimed at ensuring its correct implementation in accordance with legal and regulatory requirements. Below, I will review for you the most important main points for each stage:
The first phase of implementing electronic invoicing begins on December 4, 2021 AD, and includes the issuance and preservation phases. During this phase, all persons subject to the electronic invoicing list, in addition to authorized representatives, will be able to issue these invoices.
The process of issuing electronic invoices at this stage is done in the same way as traditional invoices, using a compatible electronic invoicing system. It is worth noting that electronic invoices contain all the required elements according to the type of invoice, such as the necessary information about the seller and buyer, details of the goods or service provided, and their value.
The second phase of implementing the electronic invoice begins on January 1, 2023 AD. At this stage, the electronic solution is required to be integrated with the Zakat, Tax, and Customs Authority’s Zatca system, and compliance with all tax rules and instructions is guaranteed through seamless integration between the electronic solution and the authority’s system.
At this stage, electronic invoices must be issued in the required format in accordance with legal and regulatory requirements and must include full details of the business process, such as applicable taxes as well as appropriate tax codes.
The second stage of electronic invoicing requires the fulfillment of a number of basic conditions and requirements, the most important of which are the following:
You must use a technical solution that provides electronic billing services and is connected to the Internet. Therefore, this allows data to be exchanged between transacting parties, such as companies and government agencies, in a safe and reliable manner.
Implementing electronic invoicing in the second stage requires linking the technical solution to the “Fatora” platform, which is the platform affiliated with the Zakat, Tax, and Customs Authority. Therefore, this link ensures compatibility with the regulations and standards specified by the authority and facilitates the process of communication and data exchange between concerned parties.
The invoice must include all specified requirements, such as: additional fields and necessary data; To learn about the business process and invoice details, it is worth noting that the invoice must be compatible with the approved styles and formats in order to ensure that the data can be read and understood correctly.
Specific formats should be used to save and issue electronic invoices, which are XML or PDF/A3 formats, including XML. It is worth noting that the XML format is used to represent invoice data in a structured and analyzable manner, while the PDF/A3 format is used to include data in PDF format. Thus, this ensures that invoices are easy to keep and access in the future.
The elements of the electronic invoice in the second stage, according to its terms, consist of two types:
Elements of a simplified tax invoice include:
Tax invoice elements include:
The electronic billing system requires its application by several parties in accordance with the decision issued in this regard. Here are the people obligated to apply the bill:
This section includes people who carry out commercial, financial, and economic activities in the country, as they must apply electronic invoicing for all tax invoices they issue or receive.
This type of invoice includes invoices issued or received by the tax resident to and from other parties carrying out commercial and economic activities, as these parties must also apply electronic invoices and adhere to their requirements.
This type of invoice includes commercial transactions between individuals and government institutions, as the parties involved must apply electronic invoices in this case as well.
In addition, concerned parties must apply debit and credit notices electronically in order to record transactions related to discounts and receivables between different parties. It is worth noting that the application of electronic invoices in this context enhances transparency and accuracy in recording these transactions.
Electronic invoicing is a revolutionary technology that facilitates and improves the process of issuing invoices and making payments electronically. It is also an innovative alternative to traditional printed invoices, as it offers many practical and economic advantages. It is worth noting that it relies on the use of digital technology to create and send invoices and transfer the amounts due securely. In addition, this technology provides great flexibility in customizing and designing invoices, adding the necessary details, tracking and recording payments, and providing accurate financial reports. Among the basic benefits of electronic invoicing are: reducing the costs and time associated with the traditional invoicing process; eliminating the need for printing, mailing, and paper distribution; and saving resources and additional costs.
Let us adopt modern electronic invoice technology and take advantage of its benefits in our advanced and connected world with the Qoyod program. It is worth noting that the program also offers all its clients electronic invoice systems as well as point-of-sale systems, warehouses, customers, etc. This is an accounting program preferred by small and medium-sized companies in the Kingdom of Saudi Arabia.
After you know what electronic invoicing is, try Qoyod now for free for 14 days; you won't regret it. It is an accounting program that reshapes the business world so that your company or organization reaches the top.