How to Invoice as a Sole Trader

As a sole trader in Australia you invoice under your own legal name or a registered trading name, and you should quote your Australian Business Number (ABN) on every invoice. You only charge GST if you are registered for it, which becomes compulsory once your turnover reaches 75,000 dollars a year.

Your name or trading name. Because a sole trader and the individual are the same legal entity, the invoice is issued under your personal name or a business name you have registered. Either is acceptable to the ATO, but stay consistent so clients can match your invoices to your ABN and your bank account.

Always include your ABN. Quoting your 11-digit ABN matters more than many new sole traders realise. If you do not quote an ABN on an invoice for more than 75 dollars (excluding GST), the business paying you may be legally required to withhold 47 per cent of the payment and send it to the ATO under the no-ABN withholding rule. Putting your ABN on the invoice removes that risk and means you are paid the full amount.

GST only if you are registered. You charge GST only when you are registered for it. Registration is compulsory once your GST turnover hits 75,000 dollars in a 12-month period, and you must register within 21 days of crossing that threshold. Below it, registration is voluntary.

Number your invoices in sequence. Give each invoice a unique, sequential number such as 0001, 0002 and so on. Sequential numbering keeps your records tidy, avoids duplicates, and makes your bookkeeping and any future audit far simpler.

Keep your records for five years. The ATO requires you to keep copies of issued invoices and related records for at least five years from when you lodge the relevant return. Paper or digital is fine, as long as the copies are clear and unaltered.

Set clear payment terms and get paid faster. State your terms plainly, for example payment within 7 or 14 days, and note any late-payment approach up front. To get paid sooner, invoice promptly when the work is done, offer more than one payment method, and send a polite reminder as the due date approaches. A free tool such as InvoiceSonic lets you generate a numbered, ABN-ready invoice in minutes so nothing slips through the cracks. This is general information only and not tax advice; check your own situation with the ATO or a registered tax agent.