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Builders protected under the Security of Payment Act | Contracts Specialist

Security of Payment NSW:
Issuing an Invoice

Call a Security of Payments Lawyer to get help on any of your payment issues such as late payment and non-payment.

An invoice is an invaluable document that acts as a confirmation receipt of payment.

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Drafting an invoice can be quite a complex thing. Invoices for construction projects are not just like any other plain bill.

When dealing with payments, you should do it the legal way. Contracts Specialist can explain to you the important aspects of an invoice under the Security of Payment Act NSW.

What is an Invoice?

An invoice is basically referred to as the tax invoice. It is a document issued by a provider of products or services to the purchaser. It serves as a record of purchase or proof of transaction. You will need a tax invoice if the claim is more than $82.50 (including Goods and Services Tax or GST).

The customer must request for the tax invoice within thirty (30) days from the service of the products or materials or from when the customer receives a bill. The tax invoice must be provided within twenty-eight (28) days from the customer’s request

As a subcontractor or a supplier, you should specify the quantities and costs of the used products or services in the invoice. The information the invoice contains can vary depending on what has been used, the type of transaction, and the preferences of the purchasing company.

Serving a tax invoice plays a vital part in the Security of Payment process. 

Learn More: Security of Payments Lawyer

The terms INVOICE and TAX INVOICE are the same. It is a document that contains the quantities and costs of the used products and services.

Tax Invoice, Payment Claim, and Payment Schedule

A tricky question! The answer is it can be.

Both of these terms are somewhat related to each other since a tax invoice can also be a payment claim and vice versa.

The main difference is that a tax invoice is required to be given after a payment is received whilst a payment claim is necessary to be given prior to receiving the payment.

A payment claim is a document that identifies construction work and related goods and services. It is used and made to request for payment.

A payment schedule is a list of dates stating when payments will be made by one party to another. The date usually follows what is specified under the terms of the contract.

The payment schedule also states the amount the customer deemed to be payable to the supplier. It should include the reasons for the difference of the amounts if the customer schedules a lesser amount.

Dont get confused. A payment schedule is given in response to a payment claim.

First, you need to issue a payment claim. Wait until the respondent serves a payment schedule. Then upon receiving the receipt of a payment schedule, you can then issue a tax invoice.

Identifying these terms correctly can lead to getting the right amount of payment on time.

Are you having trouble getting paid? Call us now.

Tax Invoice Requirements

For a tax invoice to be valid, it must contain at least seven significant information. The invoice requirements differ based on the value of the invoice and what is being sold.

Just a little reminder, the tax invoice is normally created by the providers of goods and services. It must contain at least seven important details.

What are the Recipient-Created Tax Invoices (RCTI)?

In some special cases, the recipient of the construction goods or services may create the tax invoice and send it to the supplier. This is called Recipient Created Tax Invoices (RCTI).

After receiving the receipt of the payment claim, the payer will now create the invoice.

The payer can issue an RCTI if:

The written agreement can be a separate document.

The RCTI is valid if:

In some special cases, the purchaser can create a tax invoice. This is called as the Recipient Created Tax Invoices (RCIT).

Sample Invoice Format:

How to write a Tax Invoice?

As a part of the Security of Payment process, you should serve a tax invoice. There are multiple templates to use as the basis for your tax invoice. However, there is a general arrangement of the details on your invoice.

NSW Invoice Header | Contracts Specialist

Create a header

The header basically contains the information of your construction business.

  1. To create a tax invoice, start by putting the word ‘Tax Invoice’ at the upper right portion of the document.
  2. On the upper left side of the page, put the construction’s business name, the ABN and/or ACN, the address, and your business phone number and business email address (include your business logo if necessary).
NSW Invoice Recipient & Invoice Information | Contracts Specialist

Include the Recipient and Invoice Information

  1. Include the recipient’s name, recipient’s ABN and/or ACN, the recipient’s address line, and the address of the recipient below the header.
  2. On the right side of the page, cross from the recipient’s contact information, include the details of your invoice such as the invoice number and invoice date. You should also specify your payment terms or when the payment is due.
NSW Itemised Rendered Services Invoice | Contracts Specialist

Itemise the Services Rendered

  1. Make a chart to itemise the goods or services. The chart should contain the date, materials, quantity, labour, rate, hours, and the subtotal as headings.
  2. Subtotal the amount due and add any sales tax, delivery fees, or other fees. Calculate the overall total.
  3. Include the total GST amount payable.
  4. Add supplemental information. You may also want to thank the recipient for having a transaction with you.

Need a lawyer to help you? Contracts Specialist can assist you with Security of Payments and debt recovery.

You can be confident that you are getting the right legal advice.

Contracts Specialist is a Sydney-based construction law firm that deals with Building DisputesConstruction Contracts, Debt Recovery, and Security of Payment. With Contracts Specialist, you are ensured that you are in good hands.

Security of Payment NSW Invoice
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Security of Payment NSW Invoice