Once you've sold the product or provided the service, it's invoice time. An invoice not only shows the customer or client how much money is due but provides tax information. Both you and your customers need to be able to track how much GST (Goods and Services Tax) and/or PST (Provincial Sales Tax) is paid or owed, for instance. Because invoices are such an important part of your business records, it's important to get them right.
What has to be on the invoice
There are certain pieces of information that have to be on your invoices if you are charging GST, HST and/or PST. Your invoice must include:
- your business name
- the date of the invoice
- your Business Number (also known as the GST Registration Number)
- the purchaser's name
- a brief description of the goods or services performed
- the total amount paid or payable
- the terms of payment
- an indication of items subject to GST at 5% or HST at the appropriate provincial rate, or that the items are exempt, and either the total amount of GST/HST charged, or a statement that the GST/HST is included and the total rate of tax
- if applicable, an indication of items subject to PST (also known as RST) at the provincial rate, or that the items are exempt, and either the total amount of PST charged, or a statement that the PST is included and the total rate of tax.
So what does a complete invoice look like? The sample invoice below can be used as an invoice template.
Note that this sample invoice is for a business charging GST (the Goods and Services Tax) and PST (Provincial Sales Tax). If your invoice involves charging HST (the Harmonized Sales Tax), see An Invoice Sample With HST.
To use this sample invoice, just copy it into Word or some other word processor, and substitute your relevant data, using your own customized business letterhead, if you like, and formatting as you desire.
The first address on this free invoice template is your business address; the address below it is the address of the customer who has purchased the services.
This sample invoice is a product invoice from one business to another in the same province; if you provide services, rather than sell products, you may wish to use the subheading 'Description of the Work Performed' along with the 'Invoice For' heading.
Note the statement at the bottom of the invoice, saying that the invoice amount is due within 30 days. You'll often see invoices that say, "Payable Upon Receipt", but that's just asking for trouble, because you don't necessarily know when your customer or client is seeing the invoice if you're sending it out. Using a specific terms statement like the one on this invoice gives your customer a due date, and helps you to avoid collection problems.
Invoices are even easier to do if you use accounting software. Accounting software designed for small businesses can not only be used as POS (Point of Sale) systems and print out invoices on the spot, but make it easier to calculate and keep track of taxes, such as the GST.
|From: Cypress Technologies||Invoice Number:||_________|
|Suite 7, 77 Marwood Place||Invoice Date:||dd/mm/yyyy|
|Crestwood, B.C., V6T 7Q7||GST Registration No:||_________|
|To: Sarah's Computer Bin|
|8424 Business Plaza|
|Attn: Sarah Norgaard|
|HP OfficeJet Inkjet Color Printer||$583.97||1||$583.97||$29.20||$40.88||$654.05|
|Payment Terms: To be paid within 30 days of Invoice Date|
Other Invoice Samples
Here are more invoice samples for your small business that you may find useful.
- Simple Invoice Template (selling products with no taxes)
- Service Invoice Template (selling services with no taxes)