Invoicing tips for South African small businesses
Good invoicing habits get you paid faster, whatever software you use. These are the ones that make the biggest difference for small businesses.
Invoice as soon as the work is done
The longer you wait to invoice, the longer you wait to be paid. Send the invoice the same day you finish the job or deliver the goods, while the work is fresh in your client's mind.
Set clear payment terms
Put a due date on every invoice. Seven or 14 days is common for small businesses, and 30 days for larger clients. "Payment due on receipt" sounds firm, but a specific date is easier to follow up on.
Know whether to charge VAT
Only VAT-registered businesses may charge VAT. Many sole proprietors and new businesses aren't registered, and that's fine: send invoices without VAT. Once you're registered, add VAT at 15% and make sure your invoices meet the tax invoice requirements. Not sure if you need to register? See the VAT registration threshold.
Ask for a deposit on bigger jobs
If you need to buy materials or block out weeks of time, ask for 30% to 50% upfront. Quote the deposit clearly, and show it as a separate line on the final invoice. Our free quote generator makes the quote part easy.
Make paying you easy
Put your banking details on the invoice and ask clients to use the invoice number as their payment reference. Matching payments to invoices then takes seconds.
Follow up on late payments every week
A friendly reminder a day or two after the due date gets most invoices paid. Set aside a regular time each week to check what's overdue. Here's a simple routine for tracking unpaid invoices.
Keep your records
SARS generally expects businesses to keep records, including invoices and receipts, for five years. Storing them digitally, next to your invoices and expenses, saves a lot of searching at tax time.