Do you need an ABN to invoice clients?

May 13, 2024
minutes to read
Michael Nuciforo
Table of Contents

An Australian Business Number or ABN is a unique 11-digit number that identifies your business to the ATO, government and other companies. When starting a business in Australia, you must apply for an ABN, which must be included when you issue an invoice to a client. An ABN is a critical way to keep track of various business-related activities, such as GST status and eligibility for government grants. This post will cover the key ABN rules to apply when sending an invoice.

The ATO requires all businesses to include the ABN of the business issuing the invoice for tax purposes. Including the ABN on an invoice allows the recipient of the invoice to verify the legitimacy of the business and claim any GST credits they may be entitled to. Validating the ABN also helps prevent fraud and ensures that the business operates legally and is compliant with tax regulations.

Invoicing someone without an ABN may lead to tax issues and potential penalties. Because it is a legal requirement to have an ABN on your invoices, you may be subject to penalties for not adding it. Businesses that receive invoices without an ABN must withhold a higher amount of tax from the payment. This is known as the 'ABN withholding period'. The withholding rate is set at 46.5% and is a precaution against suppliers misappropriating tax payments.

Applying for an ABN is a relatively simple process. You can register for your ABN directly with Thriday and its tax partner POP Business. You can also go to the Australian Business Register website and complete the online application form. Either way, you will need to provide basic information about your business, such as your name, address, and business activity, along with proof of identity, such as a driver's license or passport. Once the application is submitted, it will be processed within 28 days.

Once you have your ABN, including it on an invoice is a simple process. Here are the steps to follow:  

  • Create an invoice template you can reuse every time you send an invoice.  
  • Include your ABN in the header or footer of the invoice template.  
  • Make sure your ABN is clearly visible and easy to read.  
  • Make sure to include your business name next to your ABN.  
  • Review your invoice to ensure all the details are correct before sending it to a client.  

Alternatively, if you are signed up for Thriday, your ABN and business name are automatically included on your invoice templates to ensure you are compliant. Thriday has multiple templates to pick from, and you can personalise the design to match your brand and colours. Sending unlimited invoices and quotes is included in your Thriday subscription, and you can sign up for a free trial now.

Custom invoice templates in Thriday
Custom invoice templates in Thriday

Do I need to include my ABN on an invoice?

Yes, if you have an Australian Business Number (ABN), you are legally required to include it on your invoices.

How should I number my invoices?

You should use a sequential numbering system for your invoices. This helps keep your invoices organised and makes tracking payments and outstanding balances easier.

Can I include my bank details on an invoice?

Yes, you can include your bank details on an invoice to make it easier for the buyer to make payment. However, you should always be cautious about sharing your bank details and ensure you use a secure method to transmit the information.

Thriday is an all-in-one-financial management platform for small business
Thriday is an all-in-one-financial management platform for small business

Can I include promotional material on an invoice?

While it is generally acceptable to include a small amount of promotional material on an invoice, you should be careful not to make it the primary focus of the document. The primary purpose of an invoice is to request payment for goods or services that have already been provided.

Is there a standard format for an invoice?

There is no standard format for an invoice, but it should be clear, easy to read, and contain all the necessary information listed above.

How should I send my invoices to customers?

You can send your invoices to customers via email, mail, or through an online invoicing platform like Thriday. Make sure that you use a method that is convenient for your client.

To stay compliant, obtaining an ABN before invoicing someone in Australia is important. Not having an ABN can lead to difficulties and potential penalties from the ATO. Invoicing someone without an ABN may also lead to additional tax being withheld on the payment by the recipient. Once you have an ABN, adding it to an invoice is easy, just make sure to include the ABN in a clear and visible location alongside your business name. Now that you have your ABN and invoice template ready, you'll be able to start invoicing your clients in no time.

DISCLAIMER: Team Thrive Pty Ltd ABN 15 637 676 496 (Thriday) is an authorised representative (No.1297601) of Regional Australia Bank ABN 21 087 650 360 AFSL 241167 (Regional Australia Bank). Regional Australia Bank is the issuer of the transaction account and debit card available through Thriday. Any information provided by Thriday is general in nature and does not take into account your personal situation. You should consider whether Thriday is appropriate for you. Team Thrive No 2 Pty Ltd ABN 26 677 263 606 (Thriday Accounting) is a Registered Tax Agent (No.26262416).

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