How to send your first invoice in Canada

Your first invoice needs your business name, a unique invoice number, the date, who it is for, what you supplied, the amount, any GST/HST with your registration number, and when payment is due. Not registered for GST/HST yet? Then charge no tax at all. Here is the checklist, the CRA's rules, and how to send it.

An invoice is the bill that tells a client what they owe you, for what, and by when. It is also your record of the sale: your accountant and the CRA work from your invoices. Getting the first one right sets the pattern for every one after it.

What to put on it

• Your business name, and your address, email or phone so the client can reach you.
• An invoice number. Every invoice needs its own, and they should run in order. You can start at 1 or anywhere you like; never reuse a number.
• The date you issue it.
• The client's name, and their address if you have it.
• What you supplied: each item or job on its own line, with the quantity and price, in words the client will recognise.
• The tax on each line and the total tax, once you are registered for GST/HST, with your GST/HST number.
• The total.
• Your payment terms and due date, for example Net 30, due 15 November.
• How to pay you.

What the CRA requires

If your client is a GST/HST registrant, they need certain details on your invoice to claim back the tax you charged them. Under $100: your business name, the date and the total. From $100: also your GST/HST number and the tax charged (or a statement that tax is included, with the rate). From $500: also the client's name, your payment terms and a description of each thing you supplied. The simplest rule is to put all of it on every invoice.

Not registered for GST/HST yet?

If you are a small supplier and have not registered, do not charge GST/HST and do not show a tax line or a GST/HST number. Charging tax you are not registered to collect is not allowed. Register once your taxable sales pass $30,000 in a quarter or over four quarters in a row (see How to get a GST/HST number for a new business), and from then on charge it.

Payment terms

Say when you expect to be paid, and put the date on the invoice rather than leaving the client to work it out. Due on receipt, Net 15 and Net 30 are all common; pick what your clients expect in your trade and use it every time. Make paying easy: an invoice the client can pay by card from the email takes them seconds, and a clear due date gives you a fair reason to send a reminder.

Sending it from Todah

1. Set up your business once: Settings → Business for your name, logo and address, and, if you are registered, Settings → Books & Tax → GST/HST Registration Number.
2. Add the client: Clients, then New Client, with the email address invoices should go to.
3. Choose Invoices, then New Invoice. The number it will get is shown in the corner, starting at INV-0001.
4. Pick the client under Bill To, choose the Payment Terms (the Due Date fills itself in), and add a line for each thing you are charging for.
5. Check the tax on each line: your default tax if you are registered, or No tax or other rate if you are not.
6. Choose Create Invoice, then Send on its row. Read the preview, which shows the invoice exactly as your client will see it, and choose Send. Your client gets an email with the invoice and a PDF attached.

After you send it

• When the money arrives, record it on the invoice (card payments are recorded for you), so you always know who still owes you.
• If the due date passes, send a polite reminder. Todah can send reminders for you on a schedule you choose.
• Keep a copy of every invoice. The CRA generally expects records to be kept for six years from the end of the year they relate to.