Filing financial statements means submitting a company’s annual financial statements to the Ministry of Commerce through Qawaem, after they have been prepared under the accounting standards adopted in the Kingdom, approved, and audited by a licensed auditor where an audit is required. Once the statements are filed, you can follow the filing and check its status on the same platform. This guide explains what financial statements are, who must file them, the steps to upload them and check their status, and the mistakes that delay acceptance.
What are financial statements?
Financial statements are structured reports that summarize a business’s financial position and performance over the financial year. Management, partners, lenders and government bodies all rely on them. A complete set usually consists of:
- Statement of financial position: shows assets, liabilities and equity at the end of the period.
- Income statement, or statement of profit or loss and other comprehensive income: shows revenue, expenses and net profit or loss.
- Statement of changes in equity: shows movements in capital, retained earnings and distributions.
- Statement of cash flows: shows where cash came from and how it was used in operating, investing and financing activities.
- Notes: explain the accounting policies and the details that do not appear in the statements themselves.
In the Kingdom, these statements are prepared under International Financial Reporting Standards (IFRS) as endorsed by the Saudi Organization for Chartered and Professional Accountants (SOCPA), or under the IFRS for SMEs standard as endorsed for eligible entities, depending on the company’s situation.
Who must file financial statements?
The obligation falls mainly on companies entered in the commercial register, such as limited liability companies, joint stock companies and simplified joint stock companies, and some requirements vary with the company’s legal form and size. Listed companies have additional disclosure requirements with the Capital Market Authority (CMA), which is why their statements are published to the public. Sole establishments and entities of a special nature should confirm the requirements that apply to them with the Ministry of Commerce.
Beyond filing, financial statements are used to prepare the zakat or tax return submitted to the Zakat, Tax and Customs Authority (ZATCA), and they may be requested in financing applications and tenders. Their quality therefore matters well beyond meeting a regulatory requirement.
Steps to file financial statements on Qawaem
- Close the financial year: record the remaining entries, reconcile bank accounts, receivables and payables, and post adjusting entries such as depreciation, accruals and the inventory count.
- Prepare the statements: present the statements and notes under the standard that applies to your company, with comparative figures for the previous year.
- Audit: the licensed auditor audits the statements and issues a report. The auditor needs enough time to review documents and ask about balances.
- Internal approval: the competent body within the company, such as the manager or the board of directors, approves the statements, and they are presented to the partners or the general assembly as the company’s bylaws and articles of association require.
- Upload on Qawaem: the data is entered in the standard digital format the platform uses. The licensed auditor and the company’s delegated user usually both take part in uploading and approval, according to the roles the platform sets.
- Follow up until complete: track the request status, address any comments, and keep evidence that the filing is complete.
How to check the status of a financial statements filing
After uploading, Qawaem lets you track the request status from the establishment’s account. The platform also offers services for verifying filed statements, which other parties such as banks may use when they ask for proof of filing. If the status shows that the request was returned or has comments, read the comment carefully and work with your auditor to make the necessary changes and upload again. Do not assume the filing is complete just because you uploaded the file.
It is also worth checking previous years, especially if you recently took over the management of the company or changed auditors. If you find a year that was not filed, deal with it promptly with the auditor and the Ministry of Commerce, because gaps in the filing record can surface when you apply for financing or when the company’s standing is checked.
What you usually need to file
- Up-to-date company details in the commercial register, including the financial year, partners and capital.
- The approved financial statements with the notes and the auditor’s report.
- The auditor’s details and license.
- Platform access for the company’s delegated user.
- A resolution or minutes approving the statements, if the company’s bylaws require one.
- The trial balance, books and supporting documents, which are the basis for both preparation and audit.
Common mistakes and how to stay compliant
Mistakes that delay filing or weaken the statements
- Leaving it until the deadline: an audit takes time, and a late comment can push you past the statutory period.
- Relying on ready-made templates: ready-made financial statement templates in spreadsheets or published files help you understand the layout, but they do not reflect your accounting policies or the disclosure requirements specific to your company.
- Figures that do not match: differences between the uploaded statements and the auditor’s report or the zakat return raise questions and delay transactions.
- Out-of-date register details: changes in partners, capital or the financial year that were not updated in the register cause conflicts at upload.
- Neglecting the notes: statements without adequate notes are incomplete and do not explain the figures to the reader.
- Confusing the authorities: filing with the Ministry of Commerce does not replace the return filed with ZATCA, and the reverse is also true.
How to stay compliant all year
- Record entries regularly and reconcile bank accounts, receivables and payables periodically, rather than leaving all the work until year end.
- Keep a supporting document for every entry, stored so it is easy to find. This is the first thing your auditor will ask for.
- Reconcile revenue in the books with the e-invoices issued through FATOORA and with the returns submitted to ZATCA during the year.
- Appoint your auditor early and agree a clear timetable.
- Put the financial year end and the statutory filing period, as announced by the Ministry of Commerce, in the company calendar.
- Keep books and documents for the full period the regulations require.
- Follow Qawaem announcements and updates to the adopted standards.
Innovant can help you organize your books, prepare the statements for audit and follow up the filing steps.
