Naqood Guide: How to Correct an Approved Invoice (FTA & IFRS Compliant)

Overview

In Naqood, you have the option to edit an already issued and approved invoice. This feature is designed to help you correct errors or update details while ensuring you remain fully compliant with IFRS (International Financial Reporting Standards) and FTA (Federal Tax Authority) regulations in the UAE.

Crucially, due to strict accounting and tax rules, an issued invoice cannot simply be overwritten or reused. Below we explain how the Naqood 'Edit' function manages this complex process for you.

How the Edit Function Works: A Compliant 3-Step Process

When you click the "Edit" button on an approved invoice, Naqood automatically executes a sequence of actions required for compliance:

1. Original Invoice is Voided:

   • The original invoice (e.g., #105) is immediately deleted or voided from your active records.

   • This document is permanently stored in your archive for full audit traceability.

   • The original invoice number is permanently retired and cannot be reused.

2. New Draft is Created:

   • A new invoice is created automatically, containing all the same information as the original one (customer, items, amounts, VAT details, etc.).

   • You can then modify any fields (like the delivery date or customer TRN) as needed before saving and reissuing it.

3. New Sequential Invoice is Issued:

   • A new, unique sequential invoice number (e.g., #106) is assigned and issued. This ensures compliance with IFRS and FTA requirements, which strictly mandate that each issued invoice must have a unique and sequential number.

Why This Process is Required

Under IFRS accounting standards and FTA VAT regulations in the UAE, once an invoice has been officially issued, it forms part of your legal and auditable financial records. This means for correcting VAT invoices in the UAE:

• You cannot alter or reuse an existing invoice number.

• Any correction or change must be documented through a new, sequential invoice or a credit note.

• Your accounting system must maintain a clear audit trail showing both the original (voided) and the revised (new) invoice.

By automatically creating a new invoice and securely archiving the old one, Naqood ensures your invoicing process remains transparent, traceable, and compliant with these international standards.

Best Practice Tip: When to Edit vs. When to Credit Note

Summary of Compliance Benefits

• IFRS-compliant: Every issued invoice (original and corrected) remains part of your permanent financial records.

• FTA-compliant: Naqood guarantees each invoice number is unique, traceable, and sequential.

• Full Audit Trail: Both original and edited invoices are retained in your Naqood compliance archive for inspection.

• Automatic Handling: Naqood manages the complex void-and-reissue process to reduce human error and ensure FTA compliance.