Getting paid should be simple: you do the work, send an invoice, and receive money in your account. But it doesn’t always happen that easily. Clients forget to pay, payment terms get ignored, and small invoicing mistakes can create big delays. Your cash flow depends on how well you invoice, so you should make them clear, polished, and easy to pay. Just a few thoughtful adjustments can make a big difference.

Below, we’ll discuss some invoicing best practices for businesses in New Zealand, such as what to include in invoices, how to automate invoicing, and how to manage unpaid invoices.

What’s in this article?

• What are the main components of a commercial invoice in New Zealand?
  
• What are some common invoicing mistakes that lead to payment delays?
  
• How can businesses prevent and manage unpaid invoices effectively?
  
• How do automated invoicing solutions improve efficiency?
  
• What are the legal and tax considerations for invoicing in New Zealand?
  
• How does Stripe simplify invoicing for New Zealand businesses?
  

What are the main components of a commercial invoice in New Zealand?

A well-structured invoice can help you get paid faster and ensure compliance with New Zealand’s rules for invoicing and goods and services tax (GST). Every invoice should be straightforward, complete, and easy to process—for both your customer and your own recordkeeping. Here’s what to include:

• Your business details (your business or trading name, physical address, email, phone number, and GST number)

• Customer details—this is a GST requirement if the invoice is 1,000 New Zealand dollars (NZD) or more

• Unique invoice number and issue date

• Specific description of goods or services

• Amounts and totals (including 15% GST, if applicable)

• Payment terms and due date in plain language

• GST and compliance elements (i.e., the words “tax invoice” and an exchange rate, if foreign currency is used)

What are some common invoicing mistakes that lead to payment delays?

Even when you have reliable clients, small invoicing mistakes can slow payments. If your invoices are unclear, incomplete, or late, clients might not prioritize them. Here are some common invoicing errors that can cause payment delays.

Late invoices

If you don’t invoice promptly, you’re delaying your own payment. Make invoicing part of your routine. Send invoices immediately after delivering a product or service or set a recurring schedule (e.g., every Friday for completed work). Some regulations in New Zealand help encourage prompt invoicing. For example, the Inland Revenue Department (IRD) requires businesses to issue GST invoices to registered GST buyers within 28 days of a request (or a different date if it was agreed upon by the parties) for purchases over $200 NZD.

Missing or incorrect information

Before you send an invoice, double-check all details—especially your GST number and tax calculations. If an invoice is missing necessary information, the client might not be able to process it. Common issues include:

• No purchase order number (if required by the client)

• Billing the wrong person or department (particularly in large organizations)

• Typos or incorrect calculations, which can lead to disputes

Vague descriptions

A line item such as “Consulting services – $2,000 NZD” doesn’t tell the client much. If they don’t recognize the charge, they might delay payment as they ask for clarification. Instead, be specific about what the charge is for. Here are some examples:

• Marketing strategy consultation – 5 hours, January 10, 2025

• Website redesign – 50% deposit

No payment terms or late fees mentioned

If your invoice doesn’t state the due date, some customers won’t see payment as urgent. Avoid vague terms such as “Net 30,” and instead write something like, “Payment due by March 15, 2025,” or, “Payment required within 14 days of invoice date.”

If you charge late fees or interest, ensure you mention it in your contract and on the invoice. Transparent policies keep clients accountable. New Zealand law allows late fees only if they were agreed on up front, so include something like, “Invoices overdue by more than 30 days can incur a 5% late fee.”

Difficult payment process

If paying your invoice requires extra steps, it will take longer to get paid. Whenever possible, include a “pay now” button or link for online payments. Common mistakes might include:

• Not listing bank details for direct transfers

• Not offering online payment options

• Requiring checks, which are slow and outdated

Lack of follow-up on late payments

Some businesses might treat invoices as something to send and immediately forget. If a business doesn’t follow up, its customers might assume late payments aren’t a big deal. Businesses should set reminders and contact customers as soon as an invoice is overdue. A simple email that says, “Just checking in. Invoice #123 was due yesterday. Let us know if you need any details to process payment,” can help prompt action.

Here’s an example of how to respond when an invoice becomes overdue:

• 7 days late: Send another reminder.

• Over 14 days late: Call or email the customer with urgency.

• Over 30 days late: Consider pausing services or escalating collection efforts.

How can businesses prevent and manage unpaid invoices effectively?

Even with solid invoicing practices, some invoices will be paid late—or not at all. Try to prevent overdue invoices where possible and have a plan for managing them when they appear. Here’s how to address the problem.

Vet clients and set firm credit terms

Before you extend payment terms, research who you’re working with—especially new or large clients. Check their reputation, ask for trade references, or request a deposit up front. It’s reasonable to have stricter payment terms for clients with poor payment histories (e.g., 50% up front, shorter deadlines) while offering more flexibility to long-standing, reliable customers.

Put payment terms in writing

A straightforward contract, engagement letter, or accepted quote can reduce disputes later on. Documenting these terms can help make it easier to hold clients accountable if payments are late. Every agreement should outline:

• Payment deadlines (e.g., “Invoices are due within 14 days”)

• Late fees or interest charges, if applicable (these must be outlined beforehand to be enforceable in New Zealand)

• Consequences for nonpayment (e.g., services paused, future work stopped)

Invoice promptly and track outstanding payments

Send invoices as soon as possible after delivering a product or service; waiting weeks to bill only delays payment further. Following up the moment an invoice is overdue can increase your chance of getting paid. Use an invoice service such as Stripe Invoicing to monitor outstanding invoices and categorize them by due date:

• Current (not yet due)

• 30 days overdue

• 60 days overdue

• Over 90 days overdue (a significant stage)

Follow up early and politely

When an invoice is past due, the first step is to send a polite reminder. Clients might often forget, so a quick nudge can help resolve many late payments. Try sending a message like the following:

• 1–3 days overdue: “Just a quick reminder that Invoice #123 was due on [date]. Let us know if you need any details to process payment.”

• 7–14 days overdue: “Invoice #123 is now [X] days overdue. Please arrange payment, or contact us if there’s an issue.”

• Over 30 days overdue: Escalate with a firm yet polite message such as, “This is a final reminder before we take further action regarding Invoice #123.”

If email reminders aren’t working, call the client directly. It might be more difficult for them to ignore a phone conversation than an email.

Enforce consequences for nonpayment

Many businesses pay quickly once there are real consequences, particularly if additional fees are involved. If multiple reminders go unanswered, consider:

• Pausing services until payment is received

• Resending the invoice with a late fee added (if this was included in your contract)

• Sending a statement that lists all unpaid invoices, especially for business clients with multiple outstanding payments

Consider legal steps or a collection agency for long-overdue invoices

If the invoice remains unpaid after more than 60 days, consider:

• Hiring a collection agency (it will take a percentage, but you might still recover something)

• Filing a claim with New Zealand’s Disputes Tribunal

• Formally notifying the client of legal action—just the mention of escalation might be able to get results

Use these measures carefully as they can damage client relationships. But if a client won’t pay, recovering your money takes priority.

Automate payment reminders

Automated invoicing software can send and escalate reminders, so that you don’t have to manually chase payments and retry failed payments. You can also implement internal alerts (e.g., a calendar reminder to call any clients with invoices that are overdue by 15 or more days).

How do automated invoicing solutions improve efficiency?

Manually creating invoices, sending reminders, and tracking payments take time and leave room for error. Automated invoicing software handles this process, reducing mistakes and improving cash flow. Here’s how automation can transform your invoicing workflow.

Saves time and keeps billing consistent

Instead of drafting invoices from scratch, automated tools generate them instantly using templates or recurring billing schedules. You can send invoices on time and lower the risk of forgetting to bill a client. Businesses that automate invoicing tend to get paid faster simply because they send invoices more consistently.

Reduces human errors

Manual invoicing can lead to mistakes such as typos, duplicate invoice numbers, and incorrect tax calculations. Automation reduces these errors and checks that every invoice includes the correct details, pricing, and tax rates. That can mean fewer disputes, corrections, and payment delays.

Speeds up payments

Many invoicing platforms allow you to add a “pay now” button to invoices. This lets customers pay instantly via credit card or bank transfer. Some systems also offer direct debit or digital wallet integration.

Automates follow-ups and payment tracking

Automated systems track payments in real time and send reminders automatically, so you don’t have to manually check which invoices are overdue. You can schedule follow-up emails—one before the due date, one on the due date, and another if payment is late—so no invoice gets lost. Stripe Invoicing, for example, can retry failed payments automatically.

Syncs with accounting software

Modern invoicing tools integrate with Xero, MYOB, QuickBooks, and other accounting platforms, so your records are updated automatically when payments come in. This can prevent double data entry and give you real-time insight into your revenue, outstanding invoices, and cash flow.

Prepares your business for e-invoicing

New Zealand is moving toward e-invoicing, where invoices are exchanged directly between businesses’ accounting systems using standardized formats such as XML. While it’s currently only mandatory for some government agencies, 10,000 businesses were registered to receive e-invoices in 2023. Automated invoicing tools that support e-invoicing ensure you’re ready for this shift by reducing administrative work and payment delays.

Simplifies recordkeeping and tax compliance

With digital invoicing, all records are safely stored and automatically backed up, which is a big advantage during tax season. In New Zealand, businesses must keep invoices for at least seven years, and automation helps by archiving everything in one place. Some platforms also generate GST reports, which simplifies tax filings.

What are the legal and tax considerations for invoicing in New Zealand?

Your invoices also need to meet legal and tax requirements, especially if you have a GST-registered business. Here’s what you need to know to stay compliant.

GST invoice requirements

If your business earns more than $60,000 NZD per year, you must register for GST and charge 15% GST on most goods and services. Invoices must include the following:

• Your business name, address, and GST number

• The customer’s name and address (if the amount is $1,000 NZD or more)

• Invoice date

• A description of goods or services provided

• Taxable amount, GST added, and total amount

• The words “tax invoice”

• An exchange rate, if foreign currency is used

The level of detail required depends on the invoice amount:

• $50 NZD (excluding GST) and under: No tax invoice is required.

• $51–$999 NZD: You need a basic invoice (i.e., business details, date, description, total amount).

• $1,000 NZD and over: Full details are required, including the buyer’s name and address and a detailed GST calculation.

Recordkeeping rules

Businesses must keep invoices for at least seven years. Digital storage is fine—there is no need for paper copies—but records must be easily retrievable if the IRD requests them. Backing up invoices in cloud-based systems can prevent the loss of important financial records.

Timing rules for GST invoices

If a GST-registered customer requests an invoice, you must provide it within 28 days for purchases over $200 NZD. Most businesses issue invoices immediately after a sale or service is completed to comply and speed up payments.

E-invoicing and compliance

More government agencies in New Zealand will be required to send and receive e-invoices by 2026. If you plan to work with government agencies, e-invoicing might become a necessity.

Data security and privacy

Invoices contain sensitive business and personal details, so you must protect them. If you are emailing one, double-check the recipient’s address to avoid privacy breaches. Some businesses use password-protected PDFs or invoicing platforms with secure portals. Under New Zealand’s Privacy Act, businesses are required to take reasonable steps to protect customer information.

How does Stripe simplify invoicing for New Zealand businesses?

Stripe offers a wide range of services—including payment processing and invoicing—and it helps businesses create, send, and track invoices. Here’s how Stripe can make it easier and faster to get paid and comply with GST.

Easier invoice creation

With Stripe Invoicing, you can generate and send invoices in minutes. Stripe provides customizable templates, so you don’t have to build invoices from scratch. You can add your branding, itemized charges, and payment terms, so that every document looks consistent and thorough.

Built-in GST compliance

Stripe can help make GST compliance easier. It automatically adds your New Zealand GST number to invoices. And if a customer has a GST ID saved in their profile, Stripe labels the PDF as a “tax invoice”—an IRD requirement. Stripe can also calculate and display GST amounts automatically, which reduces the risk of errors.

Multiple payment options for faster transactions

Stripe invoices come with a payment button, which makes it simple for customers to pay online. You can accept credit cards, bank transfers, digital wallets, and direct debits, which reduces payment friction and speeds up processing. Since Stripe supports multicurrency payments, it can be an effective option if you have international clients.

Automated reminders and payment retries

Late payments slow down the movement of funds. With Stripe, you can automate reminders at set intervals (e.g., three days before the due date, on the due date, afterward). If you have recurring invoices, Stripe’s Smart Retries feature automatically attempts to collect payment again at optimized times if a transaction fails.

Real-time invoice tracking

The Stripe Dashboard gives you a live view of your invoices, showing which ones are paid and which are outstanding. You can set filters, export reports, and integrate with Xero or QuickBooks with apps via the Stripe App Marketplace to sync payments and accounting records automatically.

Recurring invoicing for ongoing projects

If you bill clients on a regular basis, such as for subscriptions or retainers, Stripe allows you to schedule recurring invoices or establish automatic billing. With this, you can send out invoices on time, reduce administrative work, and make revenue more predictable.

Safe payment processing

Customers can have confidence in Stripe’s safe checkout process. Stripe is PCI-compliant and handles sensitive payment data carefully. This can help give your customers peace of mind, which can reduce payment delays caused by security concerns.