Tips for using a sole trader invoice template in Australia
5-minute read
5-minute read
The quality of your paperwork can have an impact on how your business is perceived by customers. Scruffy quotes and correspondence, for example, could be considered an indicator of the quality of goods or services you provide. Therefore, it pays to make sure your invoicing gives the right impression, and that starts with a professional-looking invoice template.
Some notable innovations have started life written on a napkin, including (according to legend) the structure of Oprah Winfrey’s media empire, the font for all credit card numbers, and the script for the movie ‘A Few Good Men'. But that doesn't mean your business can get away with casual paperwork that looks like it's been written on the back of a napkin.
As a sole trader, you are your business, and everything associated with your business is a reflection of you and the way you operate. An amateur-looking business card makes your business look amateur too, and the same goes for all your stationery – including your invoices.
That's one reason not to compromise on your sole trader invoice template design.
To comply with Australian Taxation Office (ATO) guidelines, your sole trader invoice should feature the following information:
If you're charging GST, there are two ways to express it to comply with the guidelines:
If the invoice is for $1,000 or more:
The GST amount must be included for each individual line item. This allows you to feature a mix of GST items and GST-free items.
If the invoice is for less than $1,000:
You can still feature the GST for each item on its line. Or GST can simply be included in the invoice total, using words such as 'Total price includes GST'. You can only choose this method if GST has been charged on every item making up the total on the invoice.
If you're just starting up a business and are not sure if you need to register for GST, our Business basics for sole traders article may help.
Extra elements added to your invoices may help avoid overdue invoices and actually speed up payments.
Tips to help speed up invoice processing:
Some businesses find that offering a discount incentive for prompt or early payment works well for them, so that's something worth considering for inclusion on your invoices.
Tips to make it simple to pay you:
Another way to encourage fast payments is to let customers pay you the way that's most convenient for them. So, you might want to offer a number of options in the payment details section of your invoices, which could include:
You could also offer the option of paying with cash, or in person with a credit or debit card. A new, simple way to take in-person card and mobile wallet payments is to have a mobile app such as Westpac EFTPOS Air on your compatible device – with no extra hardware required.
A quick search online should give you plenty of options for sole trader invoice templates, including versions in Word, Excel and Google Docs formats. Just make sure the one you choose features all the mandatory fields listed in this article – and has the capacity to add extra wording that can help get you paid faster.
If you're using accounting software such as MYOB or Xero, they might provide an invoice template you could use – but make sure it's one that's suitable for use in Australia.
Doing your invoicing online or by app has many potential advantages.
Depending on the online invoicing system or accounting software you use, or if you're using the invoicing capability of the EFTPOS Air mobile app on your smartphone, you could benefit in some or all of these ways:
No, these are two separate documents. An invoice is a request for payment and must follow ATO guidelines. A receipt is a confirmation that payment has been made – and there is no mandatory format you have to follow.
You can turn an invoice into a receipt simply by renaming it, marking it as paid, and providing a payment date. Sending a receipt (or remittance advice) is a great opportunity to say a simple ‘thank you for your payment', which may help secure prompt payments in the future, as well as ongoing business.
To sum up
As the sole proprietor of your business, you'll appreciate the benefits of reducing paperwork and speeding up payments, while being compliant with ATO requirements for invoicing. How you invoice and what you include in your sole trader invoice template can help ensure you're covered in all three respects.
This information does not take into account your personal circumstances and is general. It is an overview only and should not be considered a comprehensive statement on any matter or relied upon. Consider obtaining personalised advice from a professional financial adviser and your accountant before making any financial decisions in relation to the matters discussed in this article, including when considering tax and finance options for your business. Westpac does not endorse any of the external providers referred to in this article.
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