Invoicing process: how to invoice and get paid on time

Published Wednesday 6 May 2026

Table of contents

• What is the invoicing process?
• What to include on an invoice
• Set a billing schedule
• Invoice more often to get paid more often
• Connect quotes and invoices
• Use invoice templates to save time
• Track time and materials in real time
• Check your invoices before sending
• Set clear payment terms
• How invoice software can help you
• Accepting online payments
• Help your customers pay on time
• Follow up on overdue invoices
• Common invoicing mistakes to avoid
• Streamline your invoicing with Xero
• FAQs on invoicing processes

Key takeaways

• The invoicing process covers every step from creating and sending an invoice to tracking payment and following up on overdue amounts. A consistent process keeps your cash flow healthy and reduces time spent on admin.
• In New Zealand, you're required to provide taxable supply information for supplies over $200 to GST-registered buyers within 28 days of a request. Staying on top of these requirements protects your business from compliance issues.
• Setting a regular billing schedule, using templates, and accepting online payments can significantly speed up how quickly you get paid. Invoicing software automates much of this work so you can focus on running your business.
• Clear payment terms, prompt follow-up on overdue invoices, and accurate record-keeping are the foundations of a reliable invoicing system that supports steady growth.

A strong invoicing process is one of the most practical things you can do to protect your cash flow and reduce admin. Here's how to build one that works for your business.

What is the invoicing process?

The invoicing process is the full cycle of creating, sending, tracking, and collecting payment on invoices for your products or services. It starts when you complete work or deliver goods, and it ends when you receive payment and record it in your accounts.

For small business owners, invoicing is about billing your customers accurately and on time. It's different from accounts payable processing, which focuses on receiving and paying invoices from your suppliers. Your invoicing process sits on the sales side of your finances, directly shaping when and how money flows into your business.

A reliable process means fewer missed payments, less time chasing money, and a clearer picture of your financial position at any point. It's also a core part of your accounts receivable process.

Knowing what belongs on each invoice helps you meet legal requirements and avoid payment delays.

What to include on an invoice

A complete invoice gives your customer everything they need to pay you promptly, and it keeps you compliant with New Zealand tax rules. Since 1 April 2023, the term "tax invoice" has been replaced with a requirement to provide taxable supply information for GST purposes.

For supplies over $200 to a GST-registered buyer, you must provide this information within 28 days of their request. You can find the full requirements on the IRD website.

Every invoice you send should include these details:

• Your business name, address, and contact details
• Your IRD number and GST number (if GST-registered)
• The customer's name and address
• A unique invoice number
• The invoice date and due date
• A clear description of the goods or services provided
• The quantity, unit price, and total for each line item

For GST-registered businesses, you'll also need to include:

• The words "taxable supply information" or "TSI"
• The GST amount charged
• Whether the price includes or excludes GST

Getting these details right from the start saves you from follow-up queries and delayed payments. For tips on layout and presentation, see the guide to invoice formatting. For more on what makes a complete invoice, check out the full breakdown.

Once your invoices are complete and accurate, the next step is building a schedule that keeps them going out consistently.

Set a billing schedule

A billing schedule is a dedicated time each week for creating and sending invoices. Without one, invoicing often gets pushed aside by more urgent tasks, and late invoices mean late payments.

Pick a specific day and time each week and block it in your calendar as a recurring appointment. Treat it like any other business commitment. If you don't have time to handle invoicing yourself, consider hiring a bookkeeper to keep things on track.

Sticking to a regular schedule is a great start, but invoicing more frequently can speed things up even further.

Invoice more often to get paid more often

Sending invoices weekly or immediately after completing work, rather than waiting until the end of the month, shortens the gap between finishing a job and receiving payment. This keeps cash flowing into your business more steadily.

Frequent invoicing helps you in several ways:

• Avoid backlogs by creating invoices as you complete work
• Get paid faster because customers receive invoices sooner
• Maintain steadier cash flow with regular incoming payments
• Track jobs more easily by invoicing each one individually

When you invoice promptly, it also helps to carry over the details your customer has already agreed to.

Connect quotes and invoices

Using the same descriptions and prices from your approved quote in your invoice makes it clear what your customer is paying for. This consistency reduces confusion and prevents disputes.

Connecting quotes to invoices helps you:

• Show customers exactly what they agreed to pay for
• Avoid surprises or unexplained charges on the final bill
• Keep a clear paper trail if payment issues come up

With your quotes and invoices aligned, the next step is making sure you're not spending too long creating each one.

Use invoice templates to save time

Invoice templates are pre-formatted documents that automatically calculate totals and include your standard business information. They cut out repetitive data entry and reduce the chance of errors.

Here's how to get the most from templates:

• Save templates for different service types with pre-filled descriptions
• Add regular customers' details and preferred payment terms
• Use formulas for subtotals, GST, and final amounts

As your business grows, dedicated invoicing software like Xero lets you create and send professional invoices in minutes, with templates that auto-fill customer details, tax rates, and your branding.

Templates handle the formatting, but accurate invoices also depend on recording your time and costs as you go.

Track time and materials in real time

Recording hours worked and expenses for each job as they happen means you don't have to piece together costs later. Waiting until invoicing day to work out what you're owed leads to missed charges and delays.

Digital tracking tools make this straightforward:

• Clock in and out of jobs from your phone using time-keeping apps
• Photograph receipts and link them to jobs instantly with expense apps
• Review costs per job before you create each invoice

With your time and costs tracked accurately, give each invoice a final check before it goes out.

Check your invoices before sending

A quick review before sending catches errors that could delay payment or confuse your customer. Even small mistakes, like the wrong email address or an incorrect total, can hold things up.

Run through this checklist before you hit send:

• Confirm the customer's name, address, and email are correct
• Check that the invoice date and due date are accurate
• Verify descriptions match the work completed or goods delivered
• Make sure line item totals, GST, and the final amount add up
• Ensure your business details and GST number are included

Accurate invoices also need clear payment terms so your customer knows exactly when and how to pay.

Set clear payment terms

Payment terms tell your customer when their invoice is due and how they can pay. Setting these upfront removes ambiguity and gives you a firm basis for following up if payment is late.

Common payment terms include:

• Due on receipt: payment is expected as soon as the invoice arrives
• Net 7: payment is due within seven days of the invoice date
• Net 30: payment is due within 30 days, the most common default for business invoices
• Net 60: payment is due within 60 days, sometimes used for larger clients or ongoing contracts

Choose terms that suit your cash flow needs. Shorter terms get money into your account faster, but some industries expect longer timeframes. Whatever you choose, include the terms clearly on every invoice and discuss them with new customers before you start work. For a deeper look at how different terms affect your billing, explore the full guide to invoice payment terms.

You can also encourage faster payment by offering a small discount for early settlement, for example, 2% off if paid within 10 days.

With your terms set, the right software can automate much of the invoicing work for you.

How invoice software can help you

Invoice software handles the repetitive parts of invoicing and connects directly with your accounting system. This saves you time from creating invoices through to tracking payments and preparing for tax.

Features that make a real difference for small businesses include:

• Storing your standard rates and product prices so you don't re-enter them each time
• Applying the correct GST rates and preparing tax documents automatically
• Tracking payments and showing you which invoices are paid, pending, or overdue
• Creating and sending invoices from your phone when you're on the go
• Sending automatic payment reminders so you don't have to chase manually

Xero brings all of these features together in one place, with bank feeds that reconcile payments as they arrive and a dashboard that gives you a real-time view of your cash flow. Learn more about how invoicing works and what to look for in invoicing software.

Alongside good software, offering online payment options can make it even easier for your customers to pay on time.

Accepting online payments

Online payments let customers pay invoices instantly using credit cards, debit cards, or digital wallets instead of writing cheques or arranging bank transfers. Adding a "pay now" button to your invoices typically speeds up payment times.

Online payments make sense when you want to:

• Make it easier for slow-paying customers to settle on time
• Save time when you send many invoices, even with small transaction fees
• Remove the need for posting cheques or arranging manual bank transfers

Before you set up online payments, here's what to know:

• Most payment accounts are free to set up
• Transaction fees typically run between 1–3% per payment, depending on the method

Learn more about online payment services and how they can work for your business.

Even with online payments available, some customers still need a nudge. Setting expectations early helps.

Help your customers pay on time

Setting clear expectations about payment from the beginning, and following up consistently, shows customers you take timely payment seriously.

For new customers, try this approach:

• Call after sending the first invoice to confirm they received it and have what they need
• Call the day after the due date if payment hasn't arrived
• Stay friendly and helpful in your follow-ups
• Repeat this pattern for the first three or four invoices

This early consistency removes excuses, builds a reliable payment habit, and helps customers learn your standards quickly.

When invoices do go past their due date, a structured follow-up process keeps things moving.

Follow up on overdue invoices

Even well-written invoices can go unpaid without reminders. A clear follow-up process is one of the most effective ways to protect your cash flow.

Here's a timeline that works for most small businesses:

• Send a friendly payment reminder on the due date
• Call one week after the due date to check for any issues
• Send a formal written notice with next steps after two weeks
• Consider debt collection or legal action after three weeks

Most payments arrive after the first or second reminder, so don't skip this step. Learn more about chasing outstanding invoices effectively.

Following up is essential, but preventing problems in the first place is even better.

Common invoicing mistakes to avoid

Small invoicing errors can lead to delayed payments, confused customers, and extra admin. Here are the most common mistakes to watch for:

• Sending invoices to the wrong person or email address
• Leaving off a clear due date or payment terms
• Using vague descriptions for products or services
• Forgetting to include your GST number or taxable supply information
• Not following up on overdue payments promptly
• Using inconsistent invoice numbering, which makes tracking harder

Reviewing each invoice against a simple checklist before sending it helps you catch these issues early and keep payments on schedule.

With a solid invoicing process in place, the right tools can take much of the manual work off your hands.

Streamline your invoicing with Xero

A consistent invoicing process, from accurate invoices and clear payment terms to prompt follow-up, is the foundation of healthy cash flow. Xero brings all of this together in one platform, with customisable invoice templates, automatic payment reminders, online payment options, and real-time tracking so you always know where your money stands.

Whether you're invoicing a handful of clients or managing hundreds of transactions, Xero's invoicing tools are built to save you time and help you get paid faster. Get one month free and see how Xero can simplify your invoicing.

FAQs on invoicing processes

Here are some frequently asked questions about invoicing processes to help you manage your billing with confidence.

What's the difference between billing and invoicing?

Billing is the overall process of requesting payment from customers. An invoice is the specific document you send that details the transaction, lists the products or services, and states the amount due.

How often should you send invoices?

It depends on your business. For ongoing projects, weekly or fortnightly invoicing keeps cash flowing steadily. For one-off jobs, invoice as soon as the work is complete to get paid faster.

What are the legal invoicing requirements in New Zealand?

Since 1 April 2023, GST-registered businesses must provide taxable supply information rather than a traditional tax invoice. For supplies over $200 to a GST-registered buyer, you must provide this within 28 days of a request. Full details are available on the IRD website.

How long does it take to create an invoice?

With manual methods, invoicing can take hours each week. Using accounting software with saved templates and stored customer details, you can create and send a professional invoice in just a few minutes.

What is e-invoicing, and should you use it?

E-invoicing is the electronic exchange of invoice data directly between accounting systems using a standardised format. It reduces manual data entry, speeds up processing, and improves accuracy. If you deal with government agencies or larger businesses in New Zealand, e-invoicing can streamline your compliance and payment cycles.