Example Invoice With GST & PST Taxes

What Goes on a Canadian Invoice and an Example Invoice

Invoicing
Blend Images - Jose Luis Pelaez Inc / Getty Images

Once you've sold the product or provided the service in Canada, it's invoice time. An invoice not only shows the customer or client how much money is due but provides tax information. Both you and your customers need to be able to track how much HST/GST (Harmonized Sales Tax/Goods and Services Tax) and/or PST (Provincial Sales Tax) is paid or owed, for instance. Because invoices are such an important part of your business records, it's important to get them right.

What Has to Be on the Invoice

There are certain pieces of information that have to be on your invoices if you are charging GST, HST and/or PST. Your invoice must include:

  • your business name
  • the date of the invoice
  • your Business Number (also known as the GST Registration Number)
  • the purchaser's name
  • a brief description of the goods or services performed
  • the total amount paid or payable
  • the terms of payment
  • an indication of items subject to GST at 5% or HST at the appropriate provincial rate, or that the items are exempt, and either the total amount of GST/HST charged, or a statement that the GST/HST is included and the total rate of tax
  • if applicable, an indication of items subject to PST (also known as Retail Sales Tax or RST) at the provincial rate, or that the items are exempt, and either the total amount of PST charged, or a statement that the PST is included and the total rate of tax.

So what does a complete invoice look like?

The example invoice below can be used as an invoice template.

Note that the invoice shown is for a business charging GST (the Goods and Services Tax) and PST (Provincial Sales Tax). If your invoice involves charging HST (the Harmonized Sales Tax), see An Invoice Sample With HST.

The first address on this free invoice template is your business address; the address below it is the address of the customer who has purchased the services.

This sample invoice is a product invoice from one business to another in the same province; if you provide services, rather than sell products, you may wish to use the subheading 'Description of the Work Performed' rather than 'Item' as a heading, and if billing by the hour use 'Hourly Rate' instead of 'Unit Cost' and 'Hours' instead of 'Quantity''.

How to Use This Sample

To use this sample invoice, select the portion of the web page containing the sample, copy it into Word or some other word processor (or spreadsheet such as Excel), and substitute your relevant data, using your own customized business letterhead, if you like, and formatting as you desire.

Invoice
From:  Cypress Technologies Invoice Number:_________
Suite 7, 140 Atlantis Drive Invoice Date:dd/mm/yyyy
Orillia, Ontario L3V 0A8 GST Number:_________
1-888-888-888
 
To:  Sarah's Computer Bin
8424 Traders Boulevard E
Mississauga, Ontario, L4Z 2H7
Attn:  Sarah Norgaard
 
ItemUnit CostQuantityAmount
    
HP OfficeJet Inkjet Color Printer$583.971$583.97
    
  Subtotal$583.97
  GST@5%$29.20
  PST@7%$40.88
  Grand Total$654.05
    
Payment Terms:    To be paid within 30 days of Invoice Date
 

Payment Terms

Note the statement at the bottom of the invoice, saying that the invoice amount is due within 30 days. You'll often see invoices that say, "Payable Upon Receipt", but that's just asking for trouble, because you don't necessarily know when your customer or client is seeing the invoice if you're sending it out. Using a specific terms statement like the one on this invoice gives your customer a due date, and helps you to avoid collection problems.

Return Policy

If you are selling returnable products it is a good idea to specify the return policy on the invoice (below the payment terms). The return policy should specify:

  • whether or not an invoice must accompany returns
  • whether the product can be refunded and/or exchanged
  • any conditions that apply to damaged or defective goods
  • the time limit for returns, for example "items can be returned within 30 days from the date of purchase"

Promotions

The bottom of the invoice is a good place to mention any current sales or promotions, if applicable. (See 10 Low-Cost Ways to Promote Your Business, for instance.)

Accounting Software Makes it Easy

Invoices are even easier to do if you use accounting softwareAccounting software designed for small businesses can not only be used as POS (Point of Sale) systems and print out invoices on the spot, but make it easier to calculate and keep track of taxes, such as the GST/HST. Accounting software packages allow you to easily customize the invoice format, including adding your own business logo. Some also allow billing in multiple currencies and will automatically compute exchange rates.

Other Invoice Templates

Here are more invoice samples for your small business that you may find useful.

Continue Reading...