Invoicing as a sole trader in New Zealand is straightforward — but there are rules to follow, especially if you're GST-registered. This guide covers everything from what your invoices must include to how to set payment terms that get you paid on time.

Do Sole Traders Need to Invoice?

Yes. Every time you provide a service or sell goods as a sole trader, you should issue an invoice. An invoice is both a legal record of the transaction and your way of telling the client how much they owe and when to pay.

Even if a client pays immediately (cash or bank transfer on the day), an invoice creates a paper trail for your accounting and tax records.

What Must a Sole Trader Invoice Include?

For a standard (non-GST) invoice, include:

  • Your full name or trading name
  • Your contact details (email or phone)
  • Invoice number (for your records)
  • Invoice date
  • Client's name and address
  • Description of work or goods
  • Amount charged
  • Payment due date
  • Your bank account details

If you're GST-registered, you also need to add "Tax Invoice" to the header and include your GST number and the GST amount. See our GST invoice guide for full details.

GST for Sole Traders — the Basics

You must register for GST if your annual turnover exceeds $60,000. Below that threshold, registration is optional.

If you're not GST-registered:

  • Do not charge GST on your invoices
  • Do not include a GST number
  • Your invoices are just standard invoices (not "tax invoices")

If you are GST-registered:

  • Charge 15% GST on all taxable supplies
  • Include your GST number on every invoice
  • File GST returns with IRD (usually bi-monthly)

Invoice Numbering

Use a sequential numbering system — INV-001, INV-002, and so on. This makes it easy to track invoices, reference them in client communications, and present them to your accountant at tax time.

Don't start at a huge number (like INV-10043) to look bigger than you are — clients don't care and it creates confusion.

Setting Payment Terms

Payment terms tell your client when they need to pay. Common options in New Zealand:

  • Due on receipt — payment expected immediately
  • 7 days — good for short-term project work
  • 14 days — the most common for freelancers and small service businesses
  • 20th of the following month — common in trades and construction
  • 30 days — standard for larger businesses

Choose terms that match your cash flow needs. If you're a sole trader doing regular work, 7 or 14 days is reasonable. If you're working with larger corporate clients, 20th month may be expected.

Whatever you choose, put it clearly on every invoice and make sure the client agrees before starting the work.

What Bank Account Details to Include

NZ bank accounts are formatted as: XX-XXXX-XXXXXXX-XX (e.g., 02-1234-0567890-00)

Always include:

  • Account name (your name or trading name)
  • Bank account number in full
  • Reference (your invoice number, so you can match the payment)

Some sole traders also set up a reference code like their initials + invoice number (e.g., JS-0042) to make matching easier if you have multiple clients paying at once.

Chasing Overdue Invoices

Late payment is one of the biggest headaches for NZ sole traders. Here's a simple process:

  1. Day 1 after due date: Send a friendly reminder — "Just checking you received invoice #0042, due yesterday"
  2. Day 7: Follow up again, slightly firmer
  3. Day 14: Phone call
  4. Day 30+: Consider charging late payment fees (if stated in your terms) or engaging a debt collector

You can charge interest on overdue invoices in NZ, but only if it was stated in your original terms. Adding "Interest at 2% per month will be charged on overdue amounts" to your invoice terms protects you.

Record Keeping for Sole Traders

IRD requires you to keep financial records for 7 years. This includes:

  • Copies of all invoices you issued
  • Receipts for all business expenses
  • Bank statements

A simple invoicing tool handles the invoice copy automatically. Make sure you're also keeping expense receipts — you can claim these to reduce your taxable income.

Using Free Invoicing Software as a Sole Trader

Many NZ sole traders start with Word or Excel invoices. It works — but it's slow, easy to mess up, and doesn't track what's been paid or not.

Free invoicing tools like MyBillDash give you:

  • Professional PDF invoices in seconds
  • Automatic GST calculation
  • Email delivery to clients
  • Payment status tracking (paid, overdue, sent)
  • GST reports for your IRD filing

The free plan allows 5 invoices and 5 quotes per month — enough for many sole traders. New accounts get a 2-month unlimited trial with no credit card required.