How to write an invoice that encourages fast payment

Small business owners have quite enough day-to-day challenges, without having to spend time chasing slow payers. Getting paid as quickly as possible is good for cash flow and gives you one less thing to worry about – and the way you write your invoices could help.

How could the way I write an invoice speed up payments?

The simple principle is that the easier you make it for a customer to pay you, the faster their payment is likely to be. This isn’t a guarantee, but it makes sense.

So how can you make it easier to get paid? Here are six tips.

1. Get the invoice into the hands of the right person, namely whoever is likely to be the main approver
2. Use their name on both the invoice and the envelope (if you’re posting)
3. If emailing an invoice, take the time to obtain the approver’s email address
4. Feature your mobile number on invoices so that you can address any queries promptly
5. Give customers payment methods that are easy for them to use – such as BPAY
6. Include the payment due date in a prominent position.

If you build up good personal relationships with clients, they may be more likely to pay you on time. Some businesses find that offering a discount incentive for prompt or early payment works well for them too.

What else do I need to know about writing invoices?

If you are asked to provide a customer with a tax invoice, the Australian Tax Office (ATO) states that you must provide one within 28 days of their request. The ATO also requires businesses to include specific information on their GST invoices. 

If you’re just starting out and are not sure if you need to register for and charge GST, you may find the answer in our Business basics for sole traders article.

What must be included on an Australian tax invoice?

If you are a sole trader, small business or partnership that charges GST, the ATO requires you to feature the following information on your invoices:

• The words ‘Tax invoice’ at the top
• The name (or trading name) of your business 
• Details regarding the goods/services provided, including quantities 
• Your ABN – Australian business number
• The invoice date
• The GST amount(s) either for each line item as a whole.

If the total of an invoice is less than $1,000 and all items on it are subject to 10% GST, you can include the tax as a single amount using the words ‘Total price includes GST’. If the invoice is for more than a $1,000 in total, the GST amount must be featured beside each line item.

What needs to go on a non-tax invoice in Australia?

If you’re not registered for GST and/or are not charging GST, the ATO requirements for what they call a ‘regular (non-tax)’ invoice are slightly simpler:

• The word ‘Invoice’ at the top
• The name (or trading name) of your business 
• Details regarding the goods/services provided, including quantities 
• Your ABN – Australian business number
• The invoice date
• Words such as ‘GST has not been charged’.

Does my invoice have to be in paper form?

No, paper invoices are not a requirement. Many companies now save money on paper and postage by doing their invoicing online.

This can be done in the form of an electronic invoice that’s automatically exchanged between the supplier’s and buyer’s software systems; by an emailed PDF; or more securely by emailing a link to an invoice.