Invoice Management for Small Businesses

Cash flow problems usually get blamed on slow payers, but many start earlier — at the invoice itself. An invoice sent weeks after the job, missing the ABN, with no due date, gives even a well-intentioned customer every excuse to park it. Invoicing is not admin that follows the work; it is the step that turns the work into money.

What a valid tax invoice needs

If you are registered for GST, customers can require a tax invoice for sales of $82.50 or more (including GST), and you generally must provide it within 28 days of the request. A valid tax invoice shows:

• The words "tax invoice", your business identity and ABN
• The date it was issued
• A description of what was sold, including quantity and price
• The GST amount, or a statement that the total includes GST
• For sales of $1,000 or more, the buyer's identity or ABN as well

If you are not registered for GST, do not use the words "tax invoice" and do not charge GST — issue a regular invoice instead. Registration becomes compulsory once GST turnover reaches the threshold, currently $75,000 for most businesses — check the current ATO figure if you are near it.

A workflow that actually holds up

• Invoice on completion, not at month end. Every day between finishing the work and sending the invoice is a day added to your payment cycle.
• Use the software, not a Word template. Xero and MYOB number invoices sequentially, track what is outstanding, and attach an online payment link. Word templates produce duplicate numbers and no audit trail.
• Put a real due date on it. "Payment due 14 days from invoice date" outperforms vague terms like "payment on invoice".
• Turn on automatic reminders. Both major platforms can chase politely without you lifting a finger.

What we commonly see go wrong

• Charging GST while not registered — the customer claims a credit that does not exist, and unwinding it is painful.
• Invoices issued in a personal name when the contract is with a company or trust, so the wrong entity earns the income.
• Deposits taken but never matched to a final invoice, leaving income double-counted or missed.
• No consistent numbering, which makes disputes and reviews slow and unconvincing.

A worked example

As an illustration: an electrician invoices at the end of each month for jobs completed through the month. Moving to invoicing on the day each job finishes shortens the gap between work and payment considerably — with no change to what customers owe, only to when they are asked. Combined with a payment link on the invoice, the difference in the bank account shows up surprisingly quickly. The numbers vary by business, but the direction rarely does.

When to get help

If your invoices are being questioned, if you are unsure whether you should be charging GST, or if the gap between doing the work and billing it keeps stretching, it is worth having the setup reviewed once rather than patching each invoice as it goes out.

Do I have to charge GST on my invoices?

Only if you are registered for GST. Registration is compulsory once your GST turnover reaches $75,000 (check the current ATO figure), and optional below that.

What if I make a mistake on an invoice I have already sent?

Do not delete it. Issue a credit note (adjustment note) and a corrected invoice so the audit trail stays intact — both Xero and MYOB handle this cleanly.

How long do I need to keep copies of invoices?

Generally 5 years, along with the records that support them. Software retention plus a backup you control covers this comfortably.