The three documents
| Document | When | What it does |
|---|---|---|
| Quote | Before the work | Offers a firm price for the work described. Once accepted, that's the agreed price. |
| Invoice | When payment is due | Asks for payment: what for, how much, and by when. If you're registered for GST, it's a tax invoice. |
| Receipt | After payment | Proves the client paid, and how much. |
Quote or estimate?
- A quote is a fixed price for the work it describes. If the job grows, agree the extra before you do it, rather than surprising the client on the invoice.
- An estimate is your best guess, for work you can't fully price yet. Call it an estimate on the document, and tell the client early if it's going over.
- Either way, say how long it's valid and whether the price includes GST. Quotes and GST has the wording.
Invoice or tax invoice?
Registered for GST, your invoice is a tax invoice: the words "Tax Invoice", your ABN and the GST. Not registered, it's an invoice, with no GST anywhere on it. Tax invoice vs invoice has the full list.
Receipts
Under the Australian Consumer Law, a business must give a consumer proof of the transaction for goods or services costing $75 or more, excluding GST, and for smaller amounts if the customer asks. For a service, a customer can also ask for an itemised bill, which you have to provide within seven days.
A receipt shows your name and ABN, the date, what was bought and the price paid. An invoice marked paid, with the payment date, has all of that, so there's no need for a separate document.
The other documents you'll meet
- Pro forma invoice: a preview of an invoice, often for goods going overseas or for a client who needs approval before paying. It isn't a request for payment, and it isn't a tax invoice.
- Statement: a summary of everything a client owes across several invoices. Useful for regular clients.
- Adjustment note: the ATO's name for the document a GST-registered business issues when a sale changes after the tax invoice, such as a refund or a cancelled job. Elsewhere it's called a credit note.
- Purchase order: the client's document, not yours. If they send one, put its number on your invoice.
Worked example
One job, three documents, from a designer who is registered for GST.
| Date | Document | Amount |
|---|---|---|
| 1 October | Quote Q-0049, valid 30 days | $1,650.00 including GST |
| 2 October | Client accepts the quote | |
| 9 October | Tax Invoice INV-0056, due 23 October | $1,650.00 including GST |
| 20 October | INV-0056 marked paid and emailed back | The receipt |