How to create an invoice template in Australia

Congratulations! You've set up your business, got the word out, and won your first customers. Now you're ready to send out your first invoice. But where do you start?

What we'll cover

• Creating an invoice template
• Goods and services tax (GST)
• The details required on Australian invoices
• Payment methods that can be featured.

1. Create your own invoice template or find one online

With the details provided in this article, you could create your own invoice template in Word, Excel, or a design program. Alternatively, search 'Australian tax invoice template' online, and check that the one you like features all the fields listed later in this article – plus the capacity to add extra information.

If you're using accounting software such as MYOB or Xero^TM, they might provide a free invoice template you could use.

2. Decide if you have to provide GST compliant sales invoices

An important part of setting up your invoicing process is to assess the need to charge goods and services tax (GST).

If you're registered for and charging GST, you must provide tax invoices. Any GST-registered customer of yours wanting to claim GST credits can only do so if the invoice you give them is a formal tax invoice. Therefore, it must use the heading 'Tax invoice' or similar.

If you're not registered for and charging GST, your invoices can just use the heading 'Invoice', but they should make it clear that 'No GST has been charged'.

Do I have to register for GST?

If your business has a GST turnover of $75,000 or more, you must register for GST. Exceptions are not-for-profit organisations and businesses providing taxi travel services, including ride sourcing and ride sharing. Their GST threshold is $150,000.

GST turnover is your total business income – not your profit – minus any GST included in sales to your customers. It's based on the current and previous 11 months, not the financial year.

If you're in any doubt about whether or not you should be registered for GST, ask your accountant or a registered tax agent.

3. Put the right details on your invoice template

Your invoice represents your business, so you want it to be as professional looking as possible. Not only should it ideally feature your business logo, but there are other important details you should include:

Your business details:

• Business name – if you are a sole trader or freelancer you can use your personal name
• Business address (optional but a good idea)
• Contact details (optional, but important to address queries promptly)
• Australian business number (ABN).

Your customer's information:

When you send invoices, make sure you use the correct customer name, contact details and address, plus their ABN.

Remember that the person authorising payment may not be your business contact. So, to avoid delays in payment, use the best name for prompt payments on your invoices.

Details of the goods or services provided:

List the products you sold, their prices and how many were sold. Or, if you were providing a service, include a description of the work you did and the fees involved, so your customer is clear about what's being invoiced. If there's a reference number such as an order number, make sure it's included.

If you're charging GST, there are two ways to express it to comply with Australian Taxation Office (ATO) 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.

4. Make it easy for customers to pay you

Customers like choice, so the more payment options you offer them the better. Helping customers pay the most convenient way for them might speed up payments too.

Payment options you could feature on your invoices include:

• Bank-to-bank transfer (listing your bank account BSB and account number on your invoices)
• Bank-to-bank transfer using  PayID® (featuring just the ABN or mobile number you've registered for the service – so you don't have to share your bank account details)
• BPAY® if the scale of your business merits applying for an account
• Credit card over the phone using a virtual terminal
• Paying you in person via the EFTPOS Air mobile app or an EFTPOS machine, or with cash
• Paying by post with a cheque
• An international payment method (noting that to accept international currencies you may need a foreign currency account.

Specify the reference you want your customers to include on their payment to you, which might be the invoice number you've provided. And be clear about your payment terms and the due date.