Invoicing as an artist
Working with artists and artisans, some of whom are just starting out in their careers, I get asked questions about ABNs, GST and invoicing quite a lot. Once I sell their work, they need to send me an invoice so that I can pay them.
Now I’m not an accountant, and I highly recommend you talk to your own accountant about these things for professional advice. But in general, I tell my artists they need these 5 things on any invoice they send me:
1. Their ABN (Australian Business Number). While an ABN is not compulsory, it does make things much easier for both parties – for example, if I receive an invoice without an ABN, I would be required to withhold 46.5% of the payment as income tax and forward that to the ATO, which is something neither of us wants! If you are sending me an invoice because I’ve sold your artwork, it will be hard to argue that you do your art purely as a hobby – but if in doubt, you can use the ATO’s great hobby or business decision tool to help you.
2. Their bank account details. I can’t pay someone if I don’t know where to pay the money to. You would be surprised how often people leave this off their invoices, and the more I have to chase people up, the longer it takes for them to get paid. Remember to include the BSB as well as the account number.
3. Whether or not they are registered for GST (goods and services tax), and if so, the amount of GST included in the total. If you generate more than $75,000 per year you are required to register for GST, but if you earn less than that, it’s optional – the ATO has more advice about that here. There are pros and cons to being registered for GST if you earn under the threshold: if you do register, you can claim back the GST on all your business related expenses – that might be your laptop, or your art supplies, or your market stall fees. On the other hand, collecting GST on behalf of the government can have significant administrative and cash flow implications, which are especially hard the smaller your business.
4. What the invoice is for. Give me a breakdown of the goods (or service, for example if you’re running a workshop) that you are charging for.
5. Your contact details – this includes your name/company name, email and phone number at a minimum.
Do all of these things and I promise you’ll get paid much quicker, which is something all artists want!