Invoices impact payment

Create the perfect invoice to ensure you get paid on-time.

The quality of your invoices will impact the time it takes for your business to get paid. Don't let payments blow-out because your invoices aren't up to scratch, increase your chances of getting paid on time by reviewing your invoice process.

Are your invoices easy to read and do they meet the legal requirements? If not, it could be the reason you're not getting paid on time. Invoices are often pushed to the bottom of the pile because they are missing a key requirement or because detective work is needed to make sense of it. A well set-out invoice with all the necessities is more likely to get paid promptly so do your business a favour and take a good look at what you are sending to your customers. Read on to find out more about effective invoicing.

ATO requirements

There are a number of Australian Tax Office (ATO) requirements that your business needs to meet before sending out your invoices.

According to the ATO, a standard invoice should include:

  • your business name
  • your ABN
  • date of invoice
  • "Tax Invoice" if you are registered for GST or "Invoice" if you're not
  • invoice number
  • purchaser name (and address or ABN for purchases over $1000)
  • description
  • GST exclusive amount
  • GST amount
  • GST inclusive amount.

The ATO has compiled a guide to help small businesses comply with the necessary requirements. You can download the guide here >>

Layout

The invoice number, due date and total amount due should be the three most easily locatable details on your invoice. These are perhaps the most vital details on your statement and your customers should not have to search for them.

Also consider other design elements. Make your invoices easy to read by ensuring the font size is manageable and the page is not crowded. Remember that some businesses require additional space for their own purposes such as a date stamp and authorising signature. Also use standard size paper (A4) and consider using coloured paper to make sure your invoice stands out. Be sure you print the invoice yourself before sending it out to identify any design issues.

Make payment easy

Don't make it difficult for your customers to pay you. Provide a number of payment alternatives and be sure to include all the payment details on your invoices. There is a huge variety of payment options available including cash, cheque/money order, credit card, direct deposit, Bpay, and online payments (PayPal).

Whether you decide to offer one or two payment methods, or as many as possible, it is imperative you communicate the best way to pay. The simplest way to do this is to include it on the invoice. For cheque or money order payments, you will need to provide a postal address and name the cheque should be addressed to. If the customer chooses to pay via direct deposit or Bpay, you will need to provide your Bpay details or bank account details (bank name, account name, BSB and account number).

Include contact details

Your contact details should be easily identifiable on the invoice. How will your customer contact you with any issues if you don't provide your address or telephone number? It is an easy mistake to make but can be very harmful. You need to make it easy for the customer to contact you otherwise you risk your invoice being put aside and forgotten.

When you do include your contact details on the invoice, make sure it is easy to distinguish and is clear and legible. Pay particular attention if your logo incorporates these details as it can appear differently when printed.

Consider email

Think about sending your invoices via email. It is the environmentally friendly option and it also allows you to send the invoice directly to who needs it rather than being passed around the business. For example, you can bypass the accounts payable officer in favour of sending it directly to the authorising manager. Similarly, sending invoices via email eliminates the 'it must have got lost in the mail' excuse as you can add a read receipt so you are notified when the email is opened.

If you are going to send your invoices via email be certain to produce your invoice in a PDF format to avoid tampering. A word document can be easily manipulated whereas a PDF is nearly impossible to alter.

State the purchase number

Be respectful to customers operating under a purchase order system by including the purchase order number on your invoice if required. By assisting your customer in this way, it will speed up the approval process by allowing a quick cross check. Also make sure the purchase order number can be easily identified.

Alternatively, if the product or service was ordered by an individual, include their full name, or at least their surname. This should effectively speed up the authorisation process by your customers as it is clear who placed the order.

If you're still finding it difficult to get paid on time, perhaps you need to adjust your invoicing processes. Use these smarter invoicing techniques to get paid faster >>

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