Start with your ABN
As a sole trader you and the business are the same legal person, and your Australian business number identifies you for tax. Put it on every invoice. Business customers check it, and if a supplier does not quote an ABN, the payer is generally required to withhold tax from the payment at the top rate. The invoice generator checks your ABN against the Australian Business Register's check-digit formula as you type, which catches the transposed-digit mistakes that are easy to make.
If you have registered a business name ("Jo's Mobile Mechanics"), put it in Trading name and your own name in Name. If you trade under your own name, leave Trading name blank.
Are you registered for GST?
This one setting changes your invoice more than anything else.
- Not registered: your document is an invoice, not a tax invoice. You do not add GST to your prices and you must not show a GST amount. Untick "Registered for GST" in the generator and it handles this, adding a note that no GST has been charged.
- Registered: your document is a tax invoice. Add GST to taxable sales, show the GST and meet the ATO's seven required details (eight from $1,000). Leave the setting ticked.
You must register for GST once your GST turnover (roughly, your business income excluding GST) reaches $75,000 in the current or projected twelve months, and within 21 days of reaching it. Taxi and ride-sourcing drivers must register regardless of turnover. Below the threshold, registration is your choice. Registering lets you claim GST credits on business purchases, but you then charge GST and lodge activity statements.
Mid-year registration is common: invoices dated before your registration date are plain invoices; those from the registration date on are tax invoices.
What to put on the invoice
Beyond the legal requirements, a sole trader's invoice should make paying you effortless:
- A clear description of the work. "Website updates, October: 6.5 hours" is better than "Services".
- A specific due date. Pick 7 or 14 days, and the due date fills itself in.
- Your payment details. BSB and account, or a PayID (your mobile or email), which many people find easiest.
- The client's reference. Larger clients pay against purchase orders; quote the PO number in Reference.
- A sensible number sequence. Start at any number you like (INV-1001 looks more established than INV-1) and keep it unbroken.
Getting paid on time
Late payment is the biggest cash-flow problem for sole traders. What helps:
- Agree terms before you start. Put your payment terms and any late-payment interest in your quote or agreement; a note on the invoice alone is weak.
- Invoice promptly. The day the job is done, while the client is happy. The generator plus a saved client makes this a two-minute task on your phone.
- Take deposits on bigger jobs. Quote with a deposit on acceptance; invoice the deposit separately.
- Follow up on the due date. The history list shows unpaid invoices with their due dates. A friendly email on the day, a phone call a week later.
- Send a receipt when paid. Mark the invoice paid and turn it into a receipt in one click. Clients notice.
Keeping records
You must keep records of your income and expenses to complete your tax return (and your activity statements if you are registered for GST). The generator's history is a running record of what you invoiced and what has been paid, but it lives in your browser. Export a backup regularly and keep it with your other business records. Invoice Pro adds a CSV export that your accountant or bookkeeping software can import.
Quotes first, invoices second
For any job where the price might be disputed later, send a quote first. The quote generator uses the same editor; when the client accepts, convert it to an invoice with one click and the lines carry across.