How to grow your business with an effective invoice template

Every hour spent on admin is an hour not spent serving customers or winning new ones, and creating invoices from scratch each time is one of the easiest admin tasks to speed up. It still matters: the invoice is how you get paid. That’s why you should consider using an invoice template.

An invoice template eliminates the hassle of creating invoices whenever you need to. It lets you quickly enter data against an already-created format, saving time and effort.

What is an invoice?

An invoice is a document a business sends another business or customers detailing the products or services provided. It is a request for payment and a transaction record, ensuring both parties are aligned on the goods or services exchanged and their financial obligations. An invoice contains several details, such as:

• The quantity of goods
• The amount charged
• The payment terms
• The terms of the transaction

Importance of invoicing

Invoices are the record of what you sold and what you are owed. This is extremely important for accurate financial recording and organisation, especially if your business deals with many clients. Imagine providing services or selling products on credit but not having a record of these transactions. How would you ask for payment? Imagine having to remember all the details of the transactions off the top of your head when it comes to asking for payment. Invoices make this process easier. The agreement itself sits in your contract or terms of trade, and the invoice shows what was supplied and what is owed under it.

Invoicing provides several benefits for your business, such as:

• Improved cash flow: Well-recorded invoices set clear expectations for when your business expects payment from its customers. This reduces the time it takes for money to flow into your business. When you have a steady flow of income, this translates to improved liquidity, enabling you to meet financial obligations and invest in growth opportunities.
• Reduced debtor days: Effective invoicing contributes to shorter debtor days (the time clients take to settle their bills). With well-structured invoices, you’re signalling your clients about the terms and due dates. This minimises the risk of overdue payments.
• Enhanced customer relationships: Your invoice is also an opportunity to build stronger relationships with your clients. A well-crafted invoice demonstrates professionalism, attention to detail, and transparency. It shows that you value your clients’ trust and want to make the payment process smooth.

When you have a steady flow of money into your business, shorter debtor days and great customer relationships, your business is more likely to grow. That’s why invoicing is essential, whether you are dealing with 10 or 100 clients.

Invoice vs tax invoice

If your business is registered for GST, you may need to issue tax invoices. A tax invoice is an invoice for a taxable sale that includes the details the ATO requires, including the GST. Your customers need one to claim a GST credit for the purchase. A business that is not registered for GST cannot issue a tax invoice and should not charge GST.

So when is your business required to provide a tax invoice? According to the ATO:

• If a customer asks for a tax invoice, you must provide one within 28 days, unless the sale is $82.50 or less (including GST).
• Many businesses issue a tax invoice for every taxable sale anyway, because business customers need one to claim their GST credits.

What must businesses include on an invoice?

A well-detailed invoice template saves time and avoids disputes. A business that is not registered for GST does not use the GST tax-invoice checklist, but other legal requirements still apply. Companies must show their company name and ACN, or a qualifying ABN, on invoices under the company identification rules. If you trade under a registered business name, show that name and your ABN. Quote your ABN on every invoice to business customers; if you do not, the customer generally has to withhold 47% from the payment. If you are registered for GST, the tax invoice requirements further down are mandatory.

Your invoice template should contain the following information:

• Invoice title: The word “Invoice” displayed at the top of the document to identify its purpose.
• Supplier’s information: your legal or trading name, your ABN and your business address.
• Recipient’s information: the recipient’s name and business address.
• Invoice date: The date when the invoice is issued.
• Description of goods or services: a description of what you supplied, the quantity and the unit price of each item.
• Total amount: the total amount payable for the goods or services.
• Payment terms: When the payment is due and the accepted payment methods.
• Invoice number: A unique number for tracking and reference purposes.
• Terms and conditions: Any relevant terms related to the sale, such as returns or warranties. Only list late payment fees or interest if your customer agreed to them in your contract or terms of trade.
• Payment remittance information: how to pay, such as bank account details (BSB and account number), PayID or BPAY details.

If you are registered for GST, the ATO requires a tax invoice to show enough information to work out these seven details:

• that the document is intended to be a tax invoice (the words “Tax invoice” at the top are the simplest way)
• the seller’s identity
• the seller’s ABN
• the date the invoice was issued
• a brief description of the items sold, including the quantity (if applicable) and the price
• the GST amount (if any) payable, which can be shown separately or, if the GST is exactly one eleventh of the total price, as a statement such as “Total price includes GST”
• the extent to which each sale on the invoice is taxable, which matters when the invoice mixes taxable and GST-free items.

For sales of $1,000 or more, the tax invoice must also show the buyer’s identity or ABN.

Invoicing tools and eInvoicing

For invoices to be effective, they must reach your clients on time and be easy for them to process. Accounting and invoicing software (Xero, MYOB, QuickBooks, Square and Invoice2go are examples) lets you create invoices from a saved template, send them by email and track whether they have been paid.

eInvoicing goes a step further. In Australia, an eInvoice is sent directly from the supplier’s software to the buyer’s software through the Peppol network, so the buyer does not need to read a PDF and key the details in again. A PDF sent by email is not an eInvoice. eInvoicing is voluntary for Australian businesses, and an eInvoice can be a valid tax invoice. The ATO’s eInvoicing pages explain how to get started.

Quick tips for sending invoices and getting paid

Creating a great invoice template is only the first step. Even after sending the invoices on time, you may still have to deal with delayed payment. So, how do you ensure you get paid on time for maximum cash flow?

• Set up automated reminders for overdue invoices. This saves time and maintains consistent communication with clients, encouraging them to address outstanding payments promptly.
• Clearly state payment terms on your invoices. Specify the due date, accepted payment methods, and any early payment discounts or agreed late payment fees.
• Provide detailed descriptions of the goods or services you’ve provided. This reduces confusion and helps clients understand the value they’re paying for.
• Offer a small discount for early payments. This can motivate clients to settle their invoices sooner, improving your cash flow.
• Assign unique invoice numbers to each invoice. This simplifies tracking and organisation, both for you and your clients.
• Regularly reconcile your invoices with your financial records to promptly identify and address any discrepancies.
• Embrace a range of payment methods, such as automated transfers and online transactions, simplifying the payment process for your clients.

How Visory helps businesses get paid

While a well-crafted invoice template is essential for your business’s cash flow and growth, managing invoices after they are sent is just as important. At Visory, we know how much time goes into tracking and following up on payments. Visory’s team, working with Delphi, Visory’s AI, can issue your invoices, track payments and follow up overdue accounts, so you can focus on the work that grows your business.

Book a discovery call to talk about your accounts receivable.