Did you know that non-compliance with VAT regulations in Saudi Arabia could cost your business up to SAR 40,000 in fines?
Since the e-invoicing law came into effect in Saudi Arabia on December 4th, 2021, all VAT-registered businesses are required to use ZATCA-compliant accounting and invoicing software. While an invoicing-only tool can handle basic e-invoicing needs, it’s the perfect time to upgrade to accounting software that simplifies VAT compliance and enhances your financial management.
From budget-friendly options to advanced solutions for large enterprises, there’s something for every business. In this article, we’ll walk you through the best accounting software in Saudi Arabia for VAT compliance and help you choose the one that fits your business needs.
The Zakat, Tax, and Customs Authority (ZATCA) is the regulatory body responsible for tax and customs policies in Saudi Arabia. A key part of its role is ensuring businesses comply with VAT regulations, which were introduced to promote transparency, accountability, and proper tax collection across all sectors.
For businesses, this means that meeting ZATCA’s requirements isn’t optional—it’s mandatory. ZATCA's guidelines specify that fines for non-compliance with e-invoicing regulations range from SAR 5,000 to SAR 50,000, depending on the type and frequency of the violation. These penalties emphasize the critical need for adopting compliant accounting software.
Using ZATCA-approved e-invoicing software helps you meet these requirements and avoid penalties, making compliance simpler and more efficient.
Now that we’ve discussed why ZATCA’s role is critical, let’s dive into how ZATCA-approved software can streamline your VAT compliance efforts.
VAT compliance can be difficult for small and medium-sized businesses (SMEs). A study shows that the complexity of the VAT system, limited tax knowledge, and high compliance costs are major obstacles for SMEs.
To address these challenges, ZATCA has approved software solutions designed to make VAT compliance easier. Using such software not only ensures you’re adhering to tax regulations but also improves your financial accuracy and business efficiency.
Here’s why your business needs ZATCA-approved software:
So, what features should you consider when selecting VAT-compliant accounting software? Let’s find out.
When selecting accounting software for VAT compliance, consider these essential features:
With these features in mind, you’ll be well-equipped to select software that meets your business’s unique needs. Let’s explore them.
Here’s a detailed look at the best VAT accounting software:
HAL ERP is built with Saudi businesses in mind, offering a comprehensive platform tailored to meet local VAT compliance requirements. Its modular design caters to startups, SMEs, and large enterprises, providing tools to manage accounting, HR, and inventory seamlessly.
Key Highlights:
Pros: Localized for Saudi regulations, modular and scalable, user-friendly interface.
Cons: Limited to the GCC region, may not be ideal for global users.
Microsoft Dynamics 365 is a robust ERP and accounting solution, ideal for medium to large enterprises. Its integration with Microsoft tools makes it a powerful option for businesses already using Microsoft products.
Key Highlights:
Pros: Highly scalable, integrates with Microsoft tools, comprehensive features.
Cons: Higher pricing, complex setup that may not suit smaller businesses.
Oracle NetSuite is a global leader in cloud ERP systems, but it’s also a strong contender for Saudi businesses. Its advanced financial management tools include VAT compliance features that adapt as your business grows.
Key Highlights:
Pros: Cloud-native, flexible, supports multi-entity businesses.
Cons: Expensive for small businesses and requires complex implementation.
For small and medium-sized enterprises, SAP Business One provides a balanced mix of simplicity and power. Its tools are designed to unify your operations while ensuring VAT compliance.
Key Highlights:
Pros: Simple yet powerful features, Scalable
Cons: Limited advanced features for larger enterprises.
Odoo Accounting Software is an easy-to-use tool that helps businesses in Saudi Arabia manage their finances. Its modular design makes it stand out. You can start small with just accounting and expand as your business grows, adding other modules like HR or inventory management.
Key Highlights:
Pros: Flexible pricing plans, additional modules for added functionality. Cons: Customization may require technical expertise, less scalable
Wafeq is a modern accounting software for businesses and accounting firms in Saudi Arabia. It offers easy e-invoicing in Arabic and English, customizable invoices, and the option to add your company stamp. Its smart spreadsheet interface makes data entry faster, helping accountants handle more work and easily migrate clients from non-ZATCA-compliant software.
Key Highlights:
Pros: Easy to use, localized for Saudi regulations, Industry-specific integrations Cons: Limited scalability and customization for growing businesses.
QuickBooks is a globally recognized accounting solution with features tailored for micro and small businesses in Saudi Arabia. With its intuitive design and automation features, it’s perfect for businesses looking for an easy-to-use accounting solution.
Key Highlights:
Pros: User-friendly, ideal for small businesses, flexible deployment options
Cons: Limited scalability and customization options for larger businesses
TallyPrime is a well-known name in the accounting software space, offering powerful tools for businesses that manage large inventories and need VAT compliance.
Key Highlights:
Pros: Strong focus on inventory and tax management, Widely trusted
Cons: Limited features, Poor User interface, Made for Accountants.
Xero is a cloud-based accounting platform designed for ease of use, with features focused on automation and mobility. It’s a great choice for businesses looking to improve efficiency. While Xero is VAT-compliant in Saudi Arabia, it doesn't meet the country's e-invoicing regulations. However, it can integrate with Hesab, a platform that supports e-invoicing in Saudi Arabia.
Key Highlights:
Pros: Mobile-friendly, multi-currency support, extensive integrations.
Cons: Limited flexibility and scalability for larger businesses.
ZohoBooks is an affordable accounting software for small businesses. It offers invoicing, expense tracking, inventory management, and VAT/GST compliance. It also works well with other Zoho apps. However, it may not be ideal for businesses with complex financial needs or specific tax requirements in Saudi Arabia.
Key Highlights:
Pros: Budget-friendly, integrates with Zoho apps, automation features.
Cons: Limited customization and flexibility for larger businesses.
Daftra is designed specifically for Saudi businesses, offering localized tools for VAT compliance and e-invoicing. Its multi-language support and user-friendly interface cater to small and medium businesses.
Key Highlights:
Pros: Localized features, easy to use
Cons: Limited advanced features for larger businesses.
Qoyod is a simple cloud accounting software for businesses in Saudi Arabia. It helps you track expenses, create customizable invoices, and access real-time financial reports from any device. Qoyod supports e-invoicing, making it easy to meet Saudi tax requirements.
Key Highlights:
Pros: Simple interface with collaborative features, custom integration options
Cons: Difficult to scale and limited customization options.
These were the best accounting software in Saudi Arabia for VAT compliance. You can check out the reviews on Capterra, Software Advice, or Quora to finalize your options. Now, let’s see why HAL ERP can be a great choice, backed by a real-world example.
Al Haram, a large retail chain in Saudi Arabia, needed to quickly implement ZATCA e-invoicing compliance without disrupting its existing ERP system.
Challenge:
Solution: HAL ERP’s VAT Care product offered a seamless integration, enabling both online and offline e-invoicing capabilities.
Results:
By using HAL ERP, Al Haram was able to implement e-invoicing quickly and efficiently, saving time and ensuring smooth operations. Your business can achieve similar results with HAL ERP.
Here’s how we can help your business:
Staying VAT-compliant doesn’t have to be complicated. The right ZATCA-approved software can help you save time, avoid penalties, and focus on growing your business.
As e-invoicing laws evolve and VAT regulations become more stringent, staying compliant has never been more crucial.
By choosing the best accounting software in Saudi Arabia for VAT compliance, like HAL ERP, you can rest assured that your business is up-to-date with the latest requirements, saving you time, money, and stress. Ready to get started? Request a free demo today and experience how HAL can simplify your VAT compliance and boost your financial management. [Book a Demo]
