Tax invoicesI know you are not an accountant, I know numbers are not your thing, I know tax invoices are not the most exciting topic, but sending out invalid invoices says a lot about your business – and it is not all good news.

“I know I shouldn’t judge, but I hustle just as hard as the next entrepreneur, I work 60+ hours per week, have two kids, pay my taxes, always pay my staff before myself – and if you are running a business it is vital you get this basic step right.”

So what are your invoices saying about you? Are you even issuing valid invoices? What the heck is a valid invoice? Why should you even care?

Ok, so let me give you an example. Earlier today I was doing a bit of “Instagram surfing” and spotted something that would be perfect for my mum and sister who have birthday’s in January and February (my Christmas shopping is done so I am planning ahead). As I was adding items to my cart – and one for me for good measure – and I thought to myself, these would make great gifts to clients at end of financial year – so for 30th June 2017.

Yes, as a business owner I plan my business up to 6 months in advance. I even get a bit excited for grabbing a bargain in the Christmas sales, supporting another local business owner and knowing that my clients will receive a funky and original gift. Heck – hit me up if you have things you think my clients would love (Australian businesses only – that’s my rule).

So, you can imagine my shock that the invoice I received by email did not have an ABN on it, the business website I ordered from had a different name to the emailed invoice and there was no mention of GST whatsoever.

“Yes, I might be at times an anal accountant, but there are very strict rules around business names, ABN’s and valid tax invoices.”

So sadly, this business just lost $1000 of sales as I can’t buy anything for my business if the supplier does not provide a valid invoice – as that cost is then not a tax deduction. Why would I risk it?

So how can you ensure your invoices are valid, correct and not upsetting your potential sales funnel:

  1. Always make sure your invoice has your business ABN on it. This is a mandatory requirement from the ATO (not my rule – so don’t get cranky at me).
  2. Always make sure your business name that you are trading under is attached to that ABN. For sole traders, this is vital. In plain English, this means if I was a sole trader my invoices could just say “Stacey Price”. However they could not say “Stacey Price Accounting & Bookkeeping” – as that is not my name (thank god). So if I wanted to trade under that name as a sole trader I would need to register that trading name with ASIC and link it to my ABN.
  3. Always send an invoice. I know, I know – but that is time consuming and boring (I can hear you from here!). But why is it time consuming – your website or bookkeeping software should do this for you at the click of a button.
  4. Understand the difference between a hobby and a business. Just because you are not earning “a shit load” does not mean you are automatically a hobby. Don’t ever make that assumption without understanding the rules. In this day and age, social media is a great market place, but the ATO can deem that to be running in a commercially viable manner – so that could mean business. Know the ATO rules (and get a great accountant on your team)

“Running a business is hard work. Bloody hard work. There is so much to get your head around – and if numbers are not your thing, then stop bashing your head against a brick wall and get the qualified help that you need.”

Getting advice in the format of “Chinese Whispers” is not how you should start or run your business. It is a recipe for disaster. They say first impressions last a lifetime, so make sure your invoice (which is usually the first business impression someone receives via email) gives off the best impression possible.