FBR Digital Invoicing: Complete Step-by-Step Setup Guide
How to get your business on FBR Digital Invoicing in 10 steps: IRIS enrolment, sandbox testing through the PRAL Digital Invoicing API, the production token and your first live invoice.
Why FBR Digital Invoicing Matters
Under the Sales Tax Act 1990 (sections 23 and 50) and Chapter XIV of the Sales Tax Rules 2006, notified through SRO 69(I)/2025, registered persons must issue electronic invoices and transmit them to the Federal Board of Revenue (FBR) in real time. The transmission runs through the Digital Invoicing API operated by PRAL (Pakistan Revenue Automation (Pvt.) Ltd, FBR's IT arm), either directly or through an FBR Licensed Integrator.
This guide walks you through the setup process, from IRIS enrolment to your first live invoice with an FBR invoice number and QR code.
What You'll Need (Requirements Checklist)
| Requirement | Details |
|---|---|
| NTN | 7-digit National Tax Number of the business |
| CNIC | 13-digit CNIC of the owner or principal officer |
| Sales tax registration | Active sales tax registration (STRN) on IRIS |
| IRIS login | Access to FBR's IRIS portal (iris.fbr.gov.pk), where you enrol for Digital Invoicing |
| Invoicing software | Invoicing software that connects to the PRAL Digital Invoicing API, such as FinSmart |
10-Step FBR Digital Invoicing Setup Process
Step 1: Check Your IRIS Registration
Log in to iris.fbr.gov.pk and confirm that your registration is active and correct:
- NTN (7 digits) and sales tax registration (STRN)
- Business name, address and province
- Contact email and mobile number
If your business is not yet registered, see Pakistan business registration for FBR first.
Step 2: Enrol for Digital Invoicing on IRIS
Open the Digital Invoicing section on IRIS, choose API integration, and select your business nature (manufacturer, importer, distributor, wholesaler, retailer, service provider and so on) and your sector. These two choices decide which sandbox scenarios you must pass later. You can integrate through PRAL's Digital Invoicing API directly (free) or through an FBR Licensed Integrator. FinSmart connects through the PRAL API.
Step 3: Get Your Sandbox Token
Once enrolment is accepted, IRIS shows the sandbox environment details, including a sandbox security token. This token authenticates your calls to the Digital Invoicing API test environment.
Keep the token confidential. See how PRAL API tokens are issued for details.
Step 4: Configure Your Invoicing Software
Enter the sandbox token in your invoicing software. In FinSmart, the FinSmart team sets up your business during onboarding; the token is stored server-side for your business and is never exposed in the browser.
FinSmart has separate sandbox and production modes, chosen at login, with separate invoice numbering for each. Start in sandbox mode.
Step 5: Set Up Customers and Products
Prepare the reference data every invoice needs:
- Customers with NTN (7 digits) or CNIC (13 digits); the registration type (Registered or Unregistered) is checked in real time through FBR's registration service
- Products with an 8-digit HS code (format 1234.5678) and a unit of measure from FBR reference data
- Sale types, tax rates by sale type and date, and SRO schedule and item serial numbers where they apply
Step 6: Validate a Test Invoice
Create a test invoice and run Validate FBR Invoice before submitting. FBR returns a validation response with numeric error codes at invoice level and item level (for example 0027, 0057 or 0077). Fix every error until the response is valid.
Step 7: Pass the Eligible Sandbox Scenarios
FBR defines 28 sandbox scenarios, SN001 to SN028. You only need to pass the scenarios eligible for your business nature and sector; IRIS lists them on the sandbox dashboard. For each one, submit an invoice with that scenario ID and confirm it returns a valid response.
See the sandbox scenarios guide for the full list.
Step 8: Get the Production Token
When every eligible scenario has passed, IRIS issues your production token. Sandbox and production tokens are separate. The FinSmart team adds the production token to your business once it is available.
Step 9: Switch to Production
Log in to FinSmart in production mode. Production submissions ask for confirmation before they are sent, because a posted production invoice is a legal tax record.
A submitted invoice cannot be edited or deleted in FinSmart. Edits and cancellations happen on IRIS within FBR's 72-hour rule.
Step 10: Issue Your First Live Invoice
Create and submit your first real invoice. FBR validates it in real time and returns the FBR invoice number (IRN). FinSmart stores the number on the invoice and prints it on the PDF with a QR code generated from it, the FBR logo and the amount in words. Check that the invoice appears on IRIS.
5 Common FBR Setup Mistakes (and How to Avoid Them)
❌ Mistake 1: Mixing Up Sandbox and Production Tokens
A sandbox token is rejected by the production endpoint, and a production token must never be used for testing.
✅ Fix: Keep the two tokens separate. FinSmart stores each mode's token separately and uses the right one for the mode you logged in with.
❌ Mistake 2: Wrong Buyer Details
A buyer NTN that is not 7 digits, a CNIC that is not 13 digits, or a registration type that does not match the buyer's FBR profile causes a validation error.
✅ Fix: Check the buyer's registration type through FBR's registration service before you submit. FinSmart does this when you pick the customer.
❌ Mistake 3: Treating Sandbox as Optional
There is no production token until the eligible sandbox scenarios have passed, so skipping sandbox simply blocks go-live.
✅ Fix: Work through every scenario IRIS lists for your business nature and sector.
❌ Mistake 4: Printing Invoices Without the FBR Invoice Number and QR Code
The printed invoice must carry the FBR invoice number and the QR code generated from it.
✅ Fix: Only print the final invoice after FBR has returned the invoice number. FinSmart adds both to the PDF.
❌ Mistake 5: Resubmitting After a Timeout Without Checking IRIS
If the connection times out, FBR may still have recorded the invoice. Submitting it again blindly can create a duplicate.
✅ Fix: Verify on IRIS first. FinSmart flags timed-out invoices and asks you to confirm on IRIS before "Force Resubmit".
Frequently Asked Questions
How long does it take to set up FBR Digital Invoicing?
It depends on your IRIS enrolment and on how many sandbox scenarios apply to your business. Most of the time goes into preparing customer and product data and passing the scenarios. The FinSmart team guides you through enrolment, sandbox testing and go-live.
What if a buyer's NTN is not registered?
FBR's registration service returns the buyer as Unregistered. You can still issue the invoice with the buyer marked Unregistered; further tax (4% by default in FinSmart) usually applies. If the NTN itself is mistyped, correct it before you submit; the validate step shows the error.
Do I have to integrate, or can I enter invoices on IRIS?
Invoices must be transmitted to FBR when they are issued. You can integrate through PRAL's Digital Invoicing API directly (free) or through an FBR Licensed Integrator. FinSmart connects through the PRAL API.
What happens if an invoice is rejected?
FBR returns a numeric error code with a message. A rejected invoice has no FBR invoice number, so you correct the data and submit it again. An invoice that FBR has accepted can be edited or cancelled on IRIS within 72 hours of submission or by month end, whichever comes first; item details can be edited once, and the header and FBR invoice number stay fixed.
Do I need special equipment or software?
You need invoicing software that connects to the PRAL Digital Invoicing API and an internet connection. No special hardware is required. FinSmart is a mobile-friendly web app that connects through the PRAL API.
Get FBR Digital Invoicing Running
The FinSmart team guides you through IRIS enrolment, sandbox scenarios and production go-live. Sandbox testing before go-live is included.
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