Cost of Accounting Services for Small Businesses in Saudi Arabia

Cost of Accounting Services for Small Businesses in Saudi Arabia

 

For small businesses in Saudi Arabia, accounting costs vary significantly based on the service model chosen—ranging from automated digital platforms to full-service professional firms. The Saudi Organization for Chartered and Professional Accountants (SOCPA) and the Zakat, Tax and Customs Authority (ZATCA) set strict compliance standards, meaning professional oversight is often a necessity rather than a luxury.

The following sections break down the market rates for different accounting solutions.

1. Outsourced Monthly Retainer Models

Most small businesses opt for an outsourced retainer, where a third-party firm handles the books for a fixed monthly fee. This is the most common model for SMEs.

Digital/Cloud Accounting Platforms:

Cost: SAR 200 – SAR 600 per month.

Scope: These are tech-first solutions (like Qoyod, Wafeq, or Zoho Books localized for KSA). The fee typically covers the software subscription and basic automated bookkeeping. You often have to enter the data yourself, with minimal human review.

Local Accounting Firms (SME Focus):

Cost: SAR 1,500 – SAR 3,500 per month.

Scope: Includes a dedicated accountant who manages your entries, reconciles bank statements, files VAT returns quarterly, and ensures Zakat compliance. This tier usually limits the volume of transactions (e.g., up to 100 invoices/month).

Mid-Tier Professional Firms:

Cost: SAR 4,000 – SAR 8,000+ per month.

Scope: Designed for growing businesses with higher complexity. Services include detailed management reporting, payroll processing, inventory management support, and advisory services.

2. Project-Based and One-Time Fees

Certain accounting requirements are not covered in monthly retainers and are billed separately as annual or one-off projects.

Annual Financial Audit:

Cost: SAR 10,000 – SAR 25,000 per year (for small entities).

Details: All foreign-owned companies and certain Saudi entities must submit audited financial statements to the Ministry of Commerce (Qawaem program). The fee depends on turnover and balance sheet complexity.

VAT Return Filing (Ad-Hoc):

Cost: SAR 500 – SAR 1,500 per filing.

Details: If you do not have a monthly retainer, firms charge per quarter to review your data and submit the VAT return to ZATCA.

Zakat & CIT Filing:

Cost: SAR 2,000 – SAR 5,000 per year.

Details: Preparation and submission of the annual Zakat and Corporate Income Tax (CIT) declaration.

E-Invoicing Setup:

Cost: SAR 1,000 – SAR 5,000 (One-time).

Details: Configuration of compliant invoicing software to link with ZATCA’s Fatoora portal (Phase 1 and Phase 2 compliance).

3. In-House Accountant Costs

Hiring a full-time accountant is generally more expensive than outsourcing but offers immediate access to financial data.

Junior Accountant (Expat):

Salary: SAR 3,500 – SAR 6,000 per month.

Hidden Costs: Visa fees, health insurance, annual ticket, and end-of-service benefits.

Senior Accountant (Saudi National):

Salary: SAR 6,000 – SAR 10,000+ per month.

Benefits: Helps with Saudization (Nitaqat) ratings but requires a higher salary baseline.

Chief Accountant / Finance Manager:

Salary: SAR 15,000+ per month.

Role: Strategic planning and team management, usually unnecessary for micro-businesses.

Factors Affecting the Fees

Quotes from accounting firms are rarely fixed; they fluctuate based on the following variables:

Volume of Transactions: A business with 50 monthly invoices pays significantly less than a retail store with 1,000 daily transactions.

Revenue Size: Higher revenue often triggers higher audit and Zakat filing fees due to the increased risk and workload.

Inventory Complexity: Businesses with physical stock (retail/manufacturing) require more complex cost accounting than service-based businesses (consulting/agencies).

Entity Type: Foreign-owned companies (MISA licensed) have stricter reporting requirements (audit is mandatory) compared to simple Sole Proprietorships owned by Saudi nationals.

Software Status: If your books are currently messy or non-existent (backlog accounting), firms will charge a "cleanup fee" ranging from SAR 5,000 to SAR 20,000 to bring records up to date before starting a retainer.

Eligibility Requirements for Personal Loans in Saudi Arabia

Eligibility Requirements for Personal Loans in Saudi Arabia

 

In Saudi Arabia, personal loans (often referred to as "personal finance" or "tawarruq") are regulated by the Saudi Central Bank (SAMA). While individual banks set their own internal policies, most financial institutions adhere to a standard set of eligibility criteria for both Saudi nationals and expatriate residents.

The following sections outline the specific requirements applicants must meet to qualify for financing.

Age and Residency Status

Banks classify applicants into two primary categories: Saudi Nationals and Non-Saudi Residents (Expats). The age requirements differ slightly between these groups.

• Saudi Nationals: The minimum age is typically 18 to 21 years old, depending on the bank.

• Expatriates: The minimum age is generally higher, usually starting at 22 or 23 years old.

• Maximum Age: For most employed applicants, the loan must be fully repaid before the borrower reaches the age of 60.

• Retirees: Retired Saudi nationals may be eligible for financing up to the age of 70 or 75, provided they have a steady pension income.

Salary Requirements

Income thresholds are a primary determinant of eligibility. Banks require proof of a stable monthly income to ensure repayment capacity.

• Saudi Nationals:

  • Basic personal loans often require a minimum monthly salary of SAR 3,000 to SAR 4,000.

  • Some premium banking tiers or specific loan products may require salaries starting from SAR 10,000.

• Expatriates:

  • The minimum salary requirement is higher, typically ranging from SAR 5,000 to SAR 7,000.

  • Certain banks may require a minimum of SAR 10,000 for expats employed in non-government sectors.

Employment and Tenure

Lenders assess the stability of the applicant's job and the reputation of their employer.

• Approved Employer List: Most banks maintain a list of "approved employers." This includes government bodies, semi-government entities, and large private corporations. Applicants working for companies not on this list may face stricter requirements or higher interest rates.

• Length of Service:

  • Saudi Nationals: Typically require 1 to 3 months of continuous service with their current employer. Government employees may sometimes qualify immediately upon employment.

  • Expatriates: Generally require 12 months of service. However, some banks may accept applicants with as little as 3 months of tenure if they work for a government entity or a major multinational corporation.

• Salary Transfer: The majority of personal loans require the applicant to transfer their monthly salary directly to the lending bank. Loans without salary transfer exist but come with higher interest rates and stricter eligibility caps.

Creditworthiness and Debt Burden Ratio (DBR)

Financial behavior is tracked centrally to prevent over-indebtedness.

• SIMAH Score: All banks check the applicant's credit history through the Saudi Credit Bureau (SIMAH). A low credit score due to late payments, defaulted bills (including telecom bills), or outstanding disputes will result in automatic disqualification.

• Debt Burden Ratio (DBR): SAMA regulations cap the percentage of a borrower's salary that can go toward monthly debt repayments.

  • Total monthly debt payments (including the new loan, credit cards, and car loans) generally cannot exceed 33% of the monthly salary for employees.

  • For retirees, this limit is often set at 25%.

  • If the borrower has a mortgage, the total DBR cap may increase to 45%.

Common Disqualifying Factors

Even if an applicant meets the age and income criteria, the following issues frequently lead to rejection:

• High Existing Debt: If the applicant's current financial obligations already consume 33% of their income, they are ineligible for further financing.

• Unapproved Employer: Working for a small start-up or a private entity that is not accredited by the bank can be a barrier.

• Contract Duration: For expatriates, the loan tenure cannot exceed the validity of their residence permit (Iqama) or their employment contract. If the remaining time on the contract is short, the loan may be denied or the term drastically reduced.

• Bounced Checks or Defaults: Any record of unpaid financial commitments or legal claims regarding finance will halt the application process.

Comparative Overview of Payment Gateways in Saudi Arabia

Comparative Overview of Payment Gateways in Saudi Arabia

 The payment gateway landscape in Saudi Arabia is regulated by the Saudi Central Bank (SAMA). All authorized providers must adhere to strict security standards (PCI-DSS) and integrate directly with the national payment scheme, "mada."

While many gateways offer similar core functions (accepting card payments), they differ significantly in their onboarding requirements, fee structures, and target business sizes.

The following analysis compares the primary providers currently active in the market.

1. Moyasar

Moyasar is a Saudi-based fintech provider known for its developer-friendly documentation and simple onboarding process. It is widely used by local startups and e-commerce stores.

• Business Eligibility: Requires a Commercial Registration (CR) or a valid Freelance Certificate (Watheeq) for individuals.

• Setup & Monthly Fees: Typically Free. There are no recurring monthly maintenance fees for the standard plan.

• Transaction Fees (Standard Plan):

  • mada: 1.5% + SAR 1.00 per transaction.

  • Visa / MasterCard: 2.5% + SAR 1.00 per transaction.

• Settlement: Automated daily or weekly transfers to all Saudi banks.

• Supported Integration: Apple Pay, STC Pay, and standard credit cards.

2. Tap Payments

Based in Kuwait but with a major presence in Saudi Arabia, Tap is popular for its "go-sell" model which allows for rapid account activation.

• Business Eligibility: Open to both companies (CR) and individual freelancers (Freelance Certificate).

• Setup & Monthly Fees: Free for the "Go" plan.

• Transaction Fees (Standard Plan):

  • mada: Approx. 1.75% + SAR 1.00.

  • Visa / MasterCard: Approx. 2.5% – 2.9% + SAR 1.00 (Fees can vary based on volume).

• Supported Banks: Compatible with all Saudi banks; also supports multi-currency accounts (KWD, AED, SAR, etc.).

• Key Feature: Strong support for social commerce; users can generate payment links instantly to share via WhatsApp or Instagram.

3. PayTabs

PayTabs is a regional provider catering to SMEs and larger enterprises. It offers strong support for businesses operating in multiple countries across the MENA region.

• Business Eligibility: Primarily focuses on registered businesses (CR).

• Setup & Monthly Fees:

  • Often involves a Startup Plan which may have a small monthly fee or a minimum balance requirement (e.g., maintaining a balance of SAR 188 to avoid suspension).

  • Enterprise plans require a custom quote.

• Transaction Fees:

  • mada: Market standard (~1.5% - 1.75%).

  • Visa / MasterCard: ~2.5% - 2.85% + SAR 1.00.

• Key Feature: "Social Commerce" dashboard for invoicing and advanced fraud protection tools.

4. HyperPay

HyperPay is positioned as an enterprise-grade solution, often used by large retailers, government entities, and high-volume marketplaces.

• Business Eligibility: Geared toward established companies with Commercial Registrations.

• Setup & Monthly Fees: Custom Quote. Unlike self-service gateways, HyperPay typically charges a setup fee and an annual maintenance fee, which varies based on the negotiation.

• Transaction Fees: Highly variable. High-volume merchants negotiate rates significantly lower than the standard market rate.

• Key Feature: Deep integration with major ERP systems and support for complex recurring billing models.

5. MyFatoorah

Originally from Kuwait, MyFatoorah focuses heavily on simplicity and "payment links" for small merchants and Instagram sellers.

• Business Eligibility: Accepts Freelancers and CR holders.

• Setup & Monthly Fees: Free for the standard account.

• Transaction Fees:

  • mada: Competitive (often around 1.5% - 1.75%).

  • Credit Cards: Standard market rates (~2.5%).

• Key Feature: specialized in "Invoice Links" where a merchant can send a link via SMS/WhatsApp and track payment status immediately. Also offers DHL shipping integration.

6. Geidea

Geidea began as a Point of Sale (POS) provider and expanded into online payments, offering an "Omnichannel" solution (linking physical store sales with online sales).

• Business Eligibility: CR holders and Freelancers.

• Setup Fees: Generally Free for the online gateway.

• Transaction Fees: Standard market rates aligned with mada regulations.

• Key Feature: Unified dashboard. A merchant can see sales from their physical shop's payment terminal and their website in the same app.

Summary of Standard Fees

Gateway	Setup Fee	Monthly Fee	Mada Fee (Approx.)	Visa/MC Fee (Approx.)
Moyasar	Free	Free	1.5% + SAR 1	2.5% + SAR 1
Tap	Free	Free	~1.75% + SAR 1	~2.5% - 2.9% + SAR 1
PayTabs	Varies	Varies	~1.75% + SAR 1	~2.7% + SAR 1
HyperPay	Custom	Custom	Custom Quote	Custom Quote

Note: Fees listed are for standard "starter" plans. Merchants with high monthly transaction volumes (e.g., above SAR 100,000/month) can typically negotiate lower rates with any of these providers.

Reasons for Personal Loan Rejection in Saudi Arabia

Reasons for Personal Loan Rejection in Saudi Arabia

Banks and financial institutions in Saudi Arabia operate under strict lending regulations set by the Saudi Central Bank (SAMA). While rejection criteria can vary slightly between banks, the vast majority of declined applications stem from specific regulatory limits, credit history issues, or employment status.

The following factors are the primary reasons why personal finance applications are rejected.

Exceeding the Debt Burden Ratio (DBR)

The most common technical reason for rejection is the Debt Burden Ratio. SAMA regulations limit the percentage of a borrower's monthly salary that can be used to repay debt.

• The 33% Rule: For most employees, total monthly debt repayments (including the new loan, credit cards, and car installments) cannot exceed 33% of their monthly salary.

• Retirees: The limit is typically stricter for retirees, often capped at 25% of their monthly pension.

• Impact: If an applicant’s existing obligations already place them near this limit, any new loan application is automatically declined, regardless of their credit score or income level.

Negative Credit History (SIMAH)

All authorized lenders in Saudi Arabia check the applicant's credit record through the Saudi Credit Bureau (SIMAH). A poor record here is a definitive block.

• Defaults: Any record of a defaulted loan or unpaid credit card balance will cause rejection.

• Late Payments: A history of frequent late payments lowers the credit score (Simah Score), signaling high risk to the lender.

• Telecom Bills: Unpaid bills from telecommunications companies (STC, Mobily, Zain) are reported to SIMAH. Outstanding dues on a mobile or internet contract often result in loan denial until the amount is cleared.

Employment Status and Employer Approval

Banks in Saudi Arabia categorize employers based on stability and creditworthiness. Working for a legitimate company is not always sufficient for a loan.

• Unapproved Employers: Banks maintain an internal "Approved Employer List." If an applicant works for a start-up, a small private establishment, or a company that is not on this list, they are often ineligible for personal financing.

• Lack of Salary Transfer: Many banks require the borrower’s salary to be directly transferred to them. If the employer does not have an agreement to transfer salaries to that specific bank, or if they refuse to provide a salary transfer commitment, the application may be rejected.

• Insufficient Tenure:

  • Saudi Nationals: Rejection often occurs if the applicant has been in their current job for less than 3 months (or 1 month for government sectors).

  • Expatriates: Most banks require at least 12 months of continuous service with the current employer. Applications submitted before this tenure is complete are routinely declined.

Residency and Iqama Validity (For Expatriates)

For non-Saudi residents, the loan term is strictly tied to their legal status in the Kingdom.

• Short Iqama Validity: If the applicant's residence permit (Iqama) is close to expiring, banks may reject the loan because they cannot guarantee the borrower will remain in the country long enough to repay it.

• Contract Duration: The loan tenure cannot exceed the remaining duration of the employment contract. If a worker has only 10 months left on their contract, they cannot be approved for a 5-year loan.

Salary and Age Thresholds

Even with a clean credit record, falling outside the basic demographic brackets leads to immediate disqualification.

• Minimum Salary: Applicants earning below the bank's minimum threshold (typically SAR 3,000–4,000 for Saudis and SAR 5,000–7,000 for expats) will be rejected.

• Age Limits:

  • Too Young: Applicants under 18 (or 21 for some banks/expats) are ineligible.

  • Nearing Retirement: If the loan term extends beyond the borrower’s retirement age (usually 60 for employees), the system will reject the tenure. The loan must be fully repaid before this age is reached.

Administrative and Documentation Issues

• Inconsistent Data: Discrepancies between the salary stated on the application and the amount deposited in the bank account (e.g., due to variable overtime or allowances not considered "basic salary") can trigger a rejection.

• Guarantor Requirements: In some borderline cases, a bank may request a guarantor. Failure to provide a qualified guarantor results in the closure of the application.