Need to issue an invoice in Australia? Freelancers, contractors and entrepreneurs starting their first small business must understand how to create and send invoices.
Without invoices, you don’t get paid.
Please don’t send amateurish-looking invoices that omit critical details and look like they belong in 1985 (MS Word style).
Today, we’ll explore which invoicing platforms are best while providing you with tips for creating invoices that get taken seriously.
Why Are Top-Notch Invoices Important?
Imagine finishing a job and sending a professional-looking invoice, complete with your logo and legally required information, straight to your client’s inbox. That’s the best way to leave a lasting impression.
Above: An example of a professional Australian invoice. Note the clean design, the ABN and the words “Tax Invoice”.
Create an ugly document that is missing crucial details, and communicates to your client that you’re fumbling your way through running a business.
So, why is a professional invoice necessary?
- It represents your business. The invoice is the official sale record between the two parties.
- You’ll need it during tax time. Invoices are used to calculate deductions.
- If you get audited by the ATO (Australian Tax Office), you’ll need to provide invoices that go back 5 years.
Invoicing 101 In Australia.
Creating an invoice in Australia is a relatively straightforward process.
The seven steps are as follows:
- Include the correct info: Nothing is worse than sending an invoice and having a client flag that you’re missing crucial details! Be sure to include your name, business name, ABN (Australian Business Number) or ACN, and contact details (address, phone number, and email).
- Add the recipient’s details: Check for typos. Ensure your client’s name is spelt correctly (if not, the stuff of nightmares). Your invoice should cover their name, business name, address, and ABN (if they have one).
- Create a unique invoice number: Every invoice should have a unique number to help with record-keeping and tracking. This number should be sequential and include the date the invoice was issued. We’ll cover this further down.
- Outline the services or goods provided: Clearly outline a description of each item, the quantity supplied, the unit price, and the total amount charged. Be as detailed as possible to avoid any confusion or misunderstandings.
- Provide payment details: Include your preferred payment method (e.g. bank transfer, credit card) and any relevant details, such as your bank account details or payment terms (e.g., payment within 30 days). Ask your customer to include the invoice number in their payment reference for easy reconciling.
- Add GST information: If you are registered for GST (Goods and Services Tax), you must include GST information on your invoice.
- Include payment terms: Finally, include any payment terms, such as the due date, late payment fees, and any discounts offered for early payment. Be clear with expectations and keep them realistic; 7-14 day payment terms are standard in most industries.
(Related: How To Pay Overseas Contractors From Australia).
How To Create A Professional Invoice (And What NOT To Do).
Use a high-quality paper stock and opt for a colourful, patterned border…
Unless you’re creative, stick with a simple, minimalist design. The less visual information, the better. Help the reader scan your invoice without getting overwhelmed by clutter.
Aim to keep your invoices digital (the days of paper invoices are long gone). Our tips are:
- Keep colours out of the equation unless they’re in your brand logo.
- Add your business contact information in the header or footer for ease.
- Ensure fonts are easy to read. No script or cursive writing or extravagantly bold lettering.
- Triple-check for typos, then check again.
- Ensure the font size is large enough to read, particularly on a smartphone.
Expressing gratitude to a client for the work is always nice. For a nice touch, add a personalised ‘Thank you’ at the bottom of the invoice before sending it off.
How Do I Create An Invoice Number?
As mentioned, you will need a unique invoice number for everyone you create. This is to help you and your clients (and tax auditors) track and reconcile invoices.
Be sure it’s a bit more elevated than #1 or INV-1 (not the best look for future clients).
You can use a range of styles, such as:
- Numbering invoices sequentially: INV00001, INV00002
- Starting with a unique customer code, for example, AEX00001
- Including the date at the start of your invoice number (significant for time-based services): 2023-01-001
- Combining the customer code and date, for example, AEX-2023-01-001
Whatever style you choose, replicate this on all other invoices moving forward.
Invoicing Overseas Contractors?
Resist the temptation to use PayPal. You’ll pay international currency transfer fees of up to 4%. If your annual payroll is only $250,000, you’ll pay $20,000 in transfer fees alone! We’ve reviewed the best international money transfer providers to save you thousands.
What Information Must I Include On My Australian Invoice?
Every country requires specific details to ensure tax invoices comply with business laws and regulations. Requirements for making invoices in Australia include the following:
Legally Required Information For An Australian Tax Invoice.
In Australia, be sure to include the following:
- The words “Tax Invoice” must be clearly displayed.
- Your business name and contact information.
- Your Australian Business Number (ABN) or Australian Company Number (ACN).
- The date of the invoice.
- A unique invoice number.
- A description of the goods or services provided.
- The number of goods or services provided.
- The price of the goods or services provided.
- The total amount due.
The invoice must also include information regarding GST (if applicable) and payment terms, including due dates or discounts.
Optional Information That You Can Include On An Australian Invoice.
Include the following to elevate your brand and provides the client’s finance department with your contact details if they have questions:
- Business logo.
- Contact details (phone number and email address).
- Notes about the transaction, like whether the service or items are pending delivery.
(Related: How To Start An E-Commerce Business).
What Payment Options Are Available For Australian Businesses?
We’re no longer in the era of sending cheques in the mail. It’s best to offer your clients as many of the following as you can:
- Direct bank transfers.
- Credit Cards
- Osko and PayID for instant methods.
Things to keep in mind with payment types:
- Credit cards provide convenience but may incur merchant fees.
- Direct debits require customers to set up recurring payments with their banks for funds to be automatically transferred into their accounts monthly. They bounce back for insufficient funds, meaning you must chase payments (Platforms like Xero will automate reminders).
- PayPal allows customers globally to pay securely using their email addresses and password. However, it’s known for very high fees.
How Do I Get Paid Quickly With An Australian Invoice?
There’s nothing more frustrating. The job is completed, and you’ve sent the email, but the payment is taking longer than it should.
Usually, friendly email reminders fall on deaf ears. It’s best to leave the hassling up to a trusty platform/website which will chase your client continuously (without the awkward conversations).
Our strategies for getting paid quickly with an Australian invoice are:
- Validate information: Make sure all amounts, dates, item descriptions, etc., are correct so there’s no confusion on either side.
- Specify the payment timeline: A date and time will help you and your customers avoid misunderstandings about when they need to pay.
- Send out reminders: If payments aren’t received within the specified timeframe outlined in your invoice, send out friendly reminders via email or text message so that customers know their payments are overdue. And it allows you to include a ‘Pay now’ button for instant payment by card or e-wallet.
- Offer incentives: Consider offering discounts or other incentives if customers make their payments early; this could encourage them to pay sooner rather than later
- Automated billing systems: Automated billing cycles can be established with these systems so that regular customers don’t have to manually remit payment for each acquisition.
When tracking invoices, online software tells you when the customer has opened your invoice. It can also match them with payment into your bank account to tell you when it’s paid.
What Invoicing Software Or Platforms Should I Use?
You’re spoilt for choice regarding the platforms’ capability to automate your invoice process. Here are some of the best invoicing websites and what they offer:
- Offers customisable invoices, payment tracking, and automatic reminders, with multiple payment options, a mobile app, and accounting software integration.
- For advanced features, $27.50/month for invoicing only and up to $69/month.
- Provides invoicing, accounting, and payment processing software, with customisable invoices, payment tracking, and a mobile app.
- $25/month for the starter plan and up to $60/month for the premium plan.
- Offers customisable invoices, payment tracking, and automatic reminders, with multiple payment options, mobile app, and accounting software integration.
- $15/month for self-employed and up to $50/month for the advanced plan.
- Provides free invoicing, accounting, and receipt scanning software, with customisable invoices, automatic reminders, and payment tracking.
- It’s free for invoicing, accounting, and receipt scanning software. Payment processing fees start at 1.75% per transaction.
- Offers customisable invoices, payment tracking, and automatic reminders, with multiple payment options, mobile app, and reporting capabilities.
- Free invoicing. Payment processing fees start at 1.9% per transaction.
- Provides customisable invoices, payment tracking, and automatic reminders, with multiple payment options, a mobile app, and a seller protection program.
- Free for invoicing, with payment processing fees starting at 2.6% + 30c per transaction.
- Offers customisable invoices, payment tracking, and expense tracking, with multiple payment options, mobile app, and reporting capabilities
- The basic plan starts at $5.99/month for the basic plan and up to $49.99/month for the enterprise plan.
Final Words On Creating A Professional Australian Invoice.
Creating a valid tax invoice in Australia is now easier than ever. Take this as your sign to throw out the old-school invoices (better yet, pop them in your filing cabinet… if you still have one of those).
Ensuring that all the necessary details for both parties are included, the design is easy to read, legal boxes are checked, and payment options are accessible will ensure you’re paid in no time.