Content reviewed and verified by Graham Chee, with FCPA-led practice at Local Knowledge, Mascot NSW. Continuous CPA Australia member since 1986. Prior career at Goldman Sachs, BNP Investment Management and Merrill Lynch..
TL;DR
A correct tax invoice protects your GST position; a good debtor process protects your cash. Here is how to get both right.
Key Takeaways
- Meet the ATO tax-invoice requirements so your GST is defensible
- State payment terms and a due date in plain language
- Go out the moment the work is done — not at month-end
- Offer easy payment options to remove friction
- Carry a unique number and your branding for a professional impression
The Tax Invoice Is a Compliance Document
Not just a request for payment.
If you are registered for GST, the tax invoices you issue are compliance documents — and the ones you receive determine whether you can claim GST credits. A valid tax invoice for sales of $82.50 or more must show your identity and ABN, that it is a tax invoice, the date, a description of what was supplied, and the GST amount (or a statement that the total includes GST).
Getting this right is not pedantry. Incorrect invoices create GST errors on your BAS, and missing supplier invoices mean lost credits you were entitled to. Well-configured software templates in Xero, MYOB or QuickBooks make compliant invoicing effortless once set up properly.
What Every Sales Invoice Should Do
Meet the ATO tax-invoice requirements so your GST is defensible
State payment terms and a due date in plain language
Go out the moment the work is done — not at month-end
Offer easy payment options to remove friction
Carry a unique number and your branding for a professional impression
Flow straight into your accounts receivable ledger for tracking
Turning Debtors Into Cash
A calm, systematic collection process.
Debtor management is the discipline of converting the money customers owe you into money in your account. The businesses that do this best are rarely the most aggressive — they are the most consistent. A polite reminder shortly before the due date, a firmer one just after, and a personal call for anything significantly overdue will collect the large majority of invoices without straining the relationship.
The key is to make it a system, not a mood. When reminders are automatic and follow-ups are scheduled, collecting stops feeling confrontational and simply becomes part of how the business runs. Your aged receivables report tells you exactly where to focus each week.
An Effective Debtor Workflow
Invoice Immediately
Raise the invoice as soon as work is complete, with clear terms and a due date.
Remind Automatically
Let your software send courteous reminders before and after the due date.
Escalate Personally
For accounts well past terms, make a direct, friendly call to resolve the hold-up.
Review Weekly
Work the aged receivables report every week so nothing quietly ages past the point of recovery.
Invoicing & Debtor Questions
Q.What has to be on a valid tax invoice?
For sales of $82.50 (including GST) or more you generally need your identity and ABN, the words “tax invoice”, the issue date, a description of the goods or services, and the GST amount or a statement that the price includes GST. We confirm the exact requirements for your situation.
Q.How soon should I invoice?
Immediately on completion. Every day between finishing work and issuing the invoice is a day added to when you get paid.
Q.A customer will not pay — what are my options?
Start with a documented reminder sequence and a direct conversation. For persistent non-payment there are formal options, but most disputes resolve once there is consistent, professional follow-up.
Q.Can you run our invoicing and collections?
Yes. We can raise invoices, manage the reminder process and keep your receivables ledger current, escalating only the accounts that need your involvement.
About the Author
Graham Chee, FCPA, CPA, GRCP, GRCA
Principal and Founder, Local Knowledge
Graham Chee is the principal and founder of Local Knowledge, an FCPA-led Australian practice that brings institutional-grade compliance, investment-structure and intellectual-property experience directly to owner-managed businesses. Graham is a Fellow of CPA Australia (FCPA since November 2005, continuous CPA member since 1986) and holds the OCEG Governance, Risk & Compliance Professional (GRCP) and Governance, Risk & Compliance Auditor (GRCA) designations. His prior career includes senior roles at Goldman Sachs, BNP Investment Management and Merrill Lynch. Graham was previously portfolio manager of the Asian Masters Fund (IPO December 2007 – 31 December 2009), which returned +29% in AUD terms versus the MSCI Asia Pacific (ex Japan) benchmark. He signs off on 100% of client files personally.
Areas of Expertise:
Get Tailored Advice - Contact Our Team Today
This article is general information only and does not constitute financial, tax or accounting advice. Rates, thresholds and lodgement dates change and depend on your circumstances — Graham Chee, FCPA confirms the current position for your business before you act.
Graham Chee FCPA, CPA, GRCP, GRCA · Principal, Local Knowledge · Mascot NSW · CPA-signed files