Guide on how to sending an invoice in New Zealand

Mastering the art of invoicing can reduce back-end admin, hasten payments, and project a professional image for your business. Whether you’re a sole trader or an SMB, it’s worth learning how to send an invoice, track payments, and follow up professionally.

In this post, we’re covering everything you need to know about invoicing, from crucial inclusions to templates, accounting software, best practices, and challenges. We’ll also show you how to save on FOREX fees when invoicing clients based overseas.

What is an invoice, and why do you need one?

An invoice details the products or services rendered and provides a cost breakdown and payment terms. For the seller, a professional invoice helps track sales and ensure prompt, accurate payments. Customers find invoices useful for recording purchases, monitoring inventory, and managing cash flow.

Clear, unambiguous invoices also help resolve payment disputes by providing a legal record of the mutually agreed-upon transaction.

Things to include in an invoice

The required info can vary by industry and service. Nonetheless, most invoices include the following elements:

• Header: A bold title labelling the document as an “invoice” or “tax invoice.”
  • When using eInvoicing software in New Zealand, it’s no longer required to include the term “tax invoice,” and the issuer must maintain records known as “taxable supply information.”¹
• Supplier details: Company or trading name, contact details (phone, email), address, New Zealand Business Number (NZBN), GST number (if registered for GST)
• Customer details: Company or customer name, contact details (phone, email, contact person), billing address, delivery address (if different), GST number (B2B invoices)
• Invoice number: A unique identifier to simplify invoice tracking
• Invoice date: The date the invoice was created and sent
• Goods and services: Breakdown of the goods or services provided, including quantities
• Costs: Itemised costings outlining unit prices, GST, and total amount payable
• Payment terms: Due date, payment methods and fees (bank transfer, POli, debit/credit card), late payment penalties
• Notes: Any additional information as required

Things to know when creating an invoice

There are several ways to create an invoice, each with varying levels of complexity and cost.

One free option is to enter data into a text document or spreadsheet and manually update the date and number for each invoice. But unless you’re a talented graphic designer, the result may look a tad unprofessional.

Alternatively, companies like Wise offer free invoice templates and tools. Enter the details in the relevant fields, then hit “create” to generate a polished-looking invoice containing your logo, line items, GST calculations, and more. Wise also provides free downloadable Word and Excel invoice templates.

Many established businesses use accounting software with invoicing tools, such as Xero or MYOB. These can automate manual, time-consuming tasks, including emailing invoices, monitoring bank accounts, and sending late payment reminders. Some can also generate financial reports or a “Pay Now” button that links to a payment gateway.

The best accounting programs include eInvoicing, which automatically exchanges invoices between buyers and suppliers, even when they use different accounting software. This capability slashes admin costs for business-to-business (B2B) brands with high order volumes.

Invoicing best practices

Regardless of which invoicing method you use, following best practices will improve efficiency and professionalism.

• Call on the first invoice: When dealing with a new client, give them a quick call to confirm they’ve received the invoice and understand the terms.
• Unique invoice numbers: Don’t recycle digits. Many organisations rely on invoice numbers to track and pay suppliers.
• Detailed costings: Customers value transparency. Don’t just provide a lump sum; break the invoice down into unit prices, quantities, and GST.
• Prompt invoicing: Send invoices promptly upon delivery or at the agreed-upon time (e.g., monthly).
• Clear payment terms: Buyers should know exactly how long they have to pay and what payment methods are accepted.
• Polite reminders: Gently phrased reminders one week or day before an invoice is due can reduce late payments.
• Frequent follow-ups: After the due date lapses, follow-ups can nudge clients towards paying.
• Automated messaging: Accounting platforms can save time by automating communications like reminders and follow-ups.
• eInvoicing: Many businesses prefer dealing with other businesses that use eInvoicing, as these automated networks reduce admin costs.
• Record-keeping: Accurate records support financial forecasting, tax calculations, and compliance. The IRD mandates maintaining financial records in English or Māori for at least 7 years.²
• Multiple payment methods: Offering multiple ways to pay – bank transfers, POLi, digital wallets, credit/debit cards, etc. – makes life easier for clients.
• Use PDFs: Uneditable formats like PDF can’t easily be altered, and greatly reduce fraud.

When to send an invoice? Getting the timing right

The ideal time to issue an invoice varies by industry and service type.

• When working on ad hoc or one-off jobs, most service providers, such as plumbers and accountants, prefer to send invoices immediately upon completion.
• For bigger projects, many request an upfront deposit, which is deducted from the final bill. Service providers with repeat clients often invoice monthly on a pay-per-use basis or a retainer.
• Product-based businesses usually invoice at the point of sale or upon the delivery of goods. However, tailor-made orders often entail a deposit to cover custom production costs.
• For businesses offering subscriptions, such as SaaS companies and telcos, a recurring monthly, quarterly, or annual billing schedule may make more sense.
• Progress billing might be preferred for larger, milestone-based projects with long durations, such as construction. The supplier sends invoices upon reaching agreed-upon milestones or specified points in the schedule.

Regardless of the chosen method, sending a whole bunch of invoices at once may create cash flow volatility. Many businesses spread invoices throughout the month to create smoother, more predictable payment cycles.

In New Zealand, you must send taxable supply information (invoices) to GST-registered buyers within 28 days of a request, or by an alternative agreed date.³

How to send an invoice? Different online methods available

There are several different approaches businesses can use when sending invoices.

Emailing invoices

The classic approach is to create a PDF invoice and attach it to an email. Businesses can do this manually or use accounting software to automate the process. Emails include a timestamped record for future reference if required.

Messaging invoices

Some small businesses and sole traders create invoices in a mobile app and send them to customers via SMS or messaging apps like WhatsApp, either as an image or a payment link. This approach can save time, especially for on-the-go workers, but it may be perceived as less professional in some sectors.

eInvoicing

B2B and business-to-government (B2G) companies commonly use eInvoicing, a time-saving capability that leverages secure eProcurement frameworks like Peppol. Through a compatible accounting program, eInvoicing can automatically generate, send, and track invoices on a shared network – no need to send or monitor emails.

Snail mail

Most New Zealand businesses avoid printing physical invoices due to high costs and slow postal timeframes. But some exceptions exist in more formal, or high-value sectors, such as construction, logistics, aerospace, and governance.

Challenges involved with sending and managing invoices

Creating and sending an invoice is relatively straightforward. Issues arise when chasing up payments, especially for businesses billing large numbers of customers per month.

Acounting softwares are a great way to slash admin effort by monitoring your bank account for payments and sending friendly automated reminders. Many businesses also report faster payments and improved client relationships when using automated invoicing software – no more awkward phone calls.

When dealing with international clients, foreign exchange fees can create complications and bite into your bottom line. Most payment methods, such as standard SWIFT bank transfers and credit cards, entail lousy exchange rates and eye-watering FOREX fees.

Wise Business: Simplify international invoicing

Managing the administrative side of a growing business often feels like a balancing act between staying professional and reducing manual data entry.

Wise Business helps solve these common logistical hurdles by offering an integrated invoicing tool that allows you to create, send, and track invoices in multiple currencies.

For New Zealand businesses working with international clients, this means you can bypass the high conversion fees and poor exchange rates typically associated with cross border business transactions. By providing local account details in over 8+ currencies, you can receiving payments like a local.

Expanding a business globally opens up exciting opportunities, but also new challenges like receiving payments across borders. Hidden foreign transaction fees and hefty currency conversions involved with international payments can eat into your profits and time.

Wise Business serves as a cost-effective solution where you can receive money from around the world at the speed and price of local payments.

Transform the way you receive payments with Wise Business:

• One-time fee of 65 AUD for local account details in 8+ currencies, including AUD, NZD, USD, and more—no recurring fees
• One account to hold, send, and convert money with no hidden fees or exchange rate markups
• Create and send professional invoices directly to your customers through Wise Business
• Create payment links to request money in specific currencies
• Seamlessly receive payments from customers, online sales, or PSPs like Stripe and Amazon.
• Wise is safe and secure - Trusted by 13 million people and counting

Sign up for the Wise Business account! 🚀

This general advice does not take into account your objectives, financial circumstances or needs and you should consider if it is appropriate for you.

Frequently Asked Questions

1. What is the best way to send an invoice by email?
   Accounting and invoicing software can automatically send invoices on your behalf, reducing administrative burden.

2. How do I invoice someone for the first time?
   When invoicing a client for the first time, it’s best practice to make a quick follow-up call to confirm they received the document and understand the terms.

3. How should I follow up on overdue payments?
   Accounting or invoicing software is the best way to stay on top of overdue payments. Otherwise, you can track payment manually on a spreadsheet.

Sources:

1. IRD eInvoicing
2. IRD Record keeping
3. IRD How tax invoices for GST work