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Guidance

How to write an invoice

How to write an invoice

Getting paid is undoubtedly one of the most important parts of running your own business. Just starting a business? Find out what goes into an invoice so you can start reaping the rewards of your hard work.

Knowing how to invoice your customers is a fundamental skill for any business. Getting it wrong can be costly at tax time and wreak havoc on your accounts. Here’s what you need to know.

The basics

An invoice is a record of purchase you give to your customers as part of the process of charging them for goods and services you’ve provided. There are two ways to invoice:

  • Tax invoicing: If your business is registered for GST, the invoice must include the GST amount for each specified item (good or service) for which you’re charging, along with some extra details about each item. This is known as a ‘tax invoice’.
  • Regular (non-tax) invoicing: If your business is not registered for GST (Goods & Services Tax), then your invoice will not include a taxable component. This is known as a ‘regular invoice’ or simply an ‘invoice’.

A tax invoice should include

  • Your business name (at the top)
  • The Australian Business Number (ABN) or Australian Company Number (CAN) near the business name
  • The term ‘Tax invoice’ at the top (not just 'Invoice')
  • An invoice number alongside the word ‘Tax invoice’
  • The date you’re issuing the invoice at the right-hand side
  • For goods and services costing $1,000 or more in total, put the name of the person/company receiving your goods and services
  • A description of each good and/or service provided and the quantity sold
  • Either the:
    • GST inclusive price with a statement to the effect that 'all prices inclde GST': or
    • GST-exclusive price for the goods and services showing the total for the goods and services and the GST total as a separate line item
  • Terms of payment details, including how and by what date the invoice should be paid. This may include your business’ bank account or BPAY information.

A regular (non-tax) invoice should include

  • Your business name (at the top)
  • The Australian Business Number (ABN) or Australian Company Number (CAN) near the business name
  • The word ‘Invoice’ stated prominently at the top
  • An invoice number alongside the word ‘Invoice’
  • The date on which you’re issuing the invoice at the right-hand side
  • The statement ‘GST has not been charged’ sitting prominently at the bottom
  • Terms of payment details, including how and by what date the invoice should be paid. This may include your business’ bank account or BPAY information.

Which type of invoice should you use?

It is best to provide a tax invoice to your customers if your business is registered for GST and:

  • The purchase is subject to GST
  • The purchase is more than $82.50 (including GST)

In any case, where your customer asks for a Tax Invoice in the above circumstances this must be done in 28 days.

The ATO (Australian Tax Office) has a list of standard rules for invoicing and has a factsheet to help get you started. They also have invoice examples that might be of help:

How we can help with invoicing

With a payment terminal like Emmy used with the CommBank Small Business app, you can create tax invoices and email them to your customers and yourself.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. Commonwealth Bank is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.