How to invoice

The type of invoice you need to provide will depend on whether you're registered for goods and services tax (GST).

There are two types of invoices:

1. Tax invoices - If you’re registered for GST, you're usually required to provide tax invoices.
2. Regular invoices - If you run a business that is not registered for goods and services tax (GST), your invoices won’t include a tax component. These are called regular invoices. They should not include the words 'tax invoice'.

Tax invoices

A tax invoice shows that GST was included in the price of some or all of the goods and services you sold. You need to provide a tax invoice if any of these conditions apply:

• the purchase is taxable
• the purchase is more than $82.50 (including GST)
• your customer asks for a tax invoice.

When you make a taxable sale of more than $82.50 (including GST), your GST-registered customers need a tax invoice to claim a credit for the GST in the purchase price.

Recipient created tax invoices

In special cases, the buyer can provide you with the tax invoice. These are called recipient-created tax invoices (RCTIs).

Regular invoices

If your customer requests a tax invoice and you’re not registered for GST, provide a regular invoice showing there is no GST included in the price. You can do this by including the statement ‘No GST has been charged’ or by showing the GST amount as zero.

A tax invoice must include the following 7 pieces of information to be valid. Depending on the total price of the tax invoice and how you sell your products or services, there may be more requirements.

For sales of less than $1,000 (including GST), your tax invoices must include:

1. the words ‘Tax invoice’ – preferably at the top
2. your identity as the seller, such as your business name or trading name (contact details are optional, but recommended)
3. your Australian business number (ABN)
4. the date you issued the invoice
5. a brief list of the items sold, including quantity and price
6. the GST amount payable (if any). You should display the GST amount for each item separately, or, if the GST amount is exactly one-eleventh of the total price, you can use a statement such as ‘Total price includes GST’
7. the extent to which each item sold includes GST. You’ll meet this requirement if you either:
   • show the GST amount for each item
   • clearly state that the total price includes GST.

Tax invoices for sales of $1000 (including GST) or more also need to show the buyer’s identity or ABN.

Using a standard layout for your invoice will help make it easier for your customers to find important information. Using a custom design can add a personal touch and reflect your businesses brand. If you plan to create a custom design for your business tax invoices, make sure you include the mandatory requirements.

You can generally decide how you send your invoices, including by:

• post
• email
• eInvoicing
• printable web page
• in person.

Regardless of which method you choose, sending the invoice at the time of purchase will encourage your customers to pay promptly. It's also a good idea to be predictable. If you need to send regular invoices, try sending them at the same time of day so that your customer knows when to expect them.

If your customer requests a tax invoice from you, you must provide it within 28 days of the request. Take this into account when deciding how it will be delivered.

The method that you choose must also meet your record keeping requirements.

By law, you need to keep business records for at least 5 years. Whether you keep printed or electronic records is up to you.

You need to keep all invoices for income you’ve received and payments you’ve made to others. These will help you prepare your business activity statement (BAS), income tax return and other tax obligations.

There are a number of ways to deal with unpaid debts and customer disputes. Find helpful tips and resources on what to do when you haven't been paid.

Other tips to prevent unpaid invoices include:

• having your accepted payment methods and payment terms on the invoice
• offering a variety of payment options stated on your invoice
• being detailed in your item description field - this can help prevent disputes.

If the tax invoice you sent is incorrect or incomplete, it’s not a valid tax invoice. You’ll need to replace it with a complete and correct tax invoice.

If you receive a tax invoice with missing information, ask your supplier for a valid tax invoice. You may also treat the tax invoice as valid if you can obtain the missing information from other documents the supplier has given you.

If your supplier doesn’t respond to your request for a valid tax invoice within 28 days and you can’t find the missing details in other documents from the supplier, you can seek the Australian Taxation Office’s permission to treat a document as a valid tax invoice.