Let’s chat about something that might seem a bit passe but trust me—it is SUPER important. Yep, I’m talking about tax invoices. No, don’t run away! I promise this isn’t going to be as painful as it sounds. In fact, I am here to explain why your bookkeeper (ahem, me) keeps chasing you for those pesky tax invoices. And not just any invoice, but ones that include the GST breakdown and the ABN (Australian Business Number) of your suppliers.
You might be thinking, “But can’t you just use my bank statements?” or “I’ve got the receipt—what more do you want from me?” I hear you! But here is the thing: as bookkeepers, we need these details for a few especially important reasons. And no, it’s not just because we love paperwork (though some of us kinda do).
1. GST: The Tax Man’s Watching!
Let’s start with the GST, shall we? You know, that little 10% added to almost everything we buy. If your business is registered for GST, you’ve got to keep things nice and tidy for the Australian Tax Office (ATO).
Now, if you’ve paid GST on something, you can usually claim it back as a credit. But here’s the kicker: you cannot just say you’ve paid GST—you’ve got to prove it. And the only way to prove it is by having a tax invoice that clearly shows:
No proper invoice? No GST credit! And that means you could end up paying more tax than you need to—ouch!
2. The ABN: Who Are You Doing Business With?
The ABN isn’t just a random string of numbers that your suppliers put on their paperwork for fun. It is their business identity. And if they are charging you GST, they must have an ABN. Otherwise, there is a chance they should not be charging GST at all.
If you are claiming back GST from a supplier who does not have a valid ABN, the ATO will not be happy. And trust me, we don’t want to make the tax man grumpy. When your bookkeeper (yep, that is me!) asks for an invoice with the ABN, it is because we need to make sure all your ducks are in a row and that you are only claiming what is rightfully yours.
3. The ATO Loves a Good Paper Trail
Bank statements are great for showing money going in and out, but they don’t tell the whole story. The ATO is big on documentation, and if they ever come knocking for an audit, they will want to see those invoices to back up your claims.
The more detailed the invoice, the better protected you are. It is like having a solid alibi—you’ve got the proof in your hand, and no one can argue with it!
4. It is All About Accuracy
As your bookkeeper, it is my job is to make sure everything is accurate, compliant, and ready to go when tax time rolls around. Without the right invoices, I am stuck trying to piece things together from memory or mystery receipts, and that is not going to give you the best result.
And believe me, you want the best result—a smooth, stress-free BAS lodgement and the maximum GST credits you are entitled to. (Yay, more money for you!)
So, What Should You Do?
Next time you get an invoice, take a quick peek. Does it have the following?
If yes, then you are golden! If not, politely ask your supplier to fix it up for you. Most businesses will be more than happy to help once they know you need it for compliance.
And hey, next time your bookkeeper asks for the "proper" invoice, just remember they are not being fussy—they are making sure you are protected, compliant, and claiming every dollar you can!
Stay ‘Appy!
