Common Invoicing Mistakes Every Business in Singapore Should Avoid

In Singapore, your business’ invoicing process is important for a range of reasons.

For one, it acts as a formal request for payment for the goods or services you’ve supplied. Plus, they’re a record of transactions, making them crucial when complying with the Inland Revenue Authority of Singapore (IRAS).

It’s all too easy for a mistake on an invoice to occur when you’re running a busy company. But these errors can have repercussions on your cash flow and make it harder to comply with tax regulations.

However, these mistakes are easily avoidable. We’ve put together a quick guide to common invoicing errors, as well as how to fix an issue when it happens.

1. Not including the correct details on your invoice

Incorrect details are one of the simplest and most common invoicing mistakes.

This error can cause issues with payments, as your customer likely won’t want to pay the invoice if it isn’t accurate.

Make sure that your invoice contains all the essential data and that each field is accurately filled out. 

In Singapore, you’ll need to include the following information on your invoice:

• The word “invoice”
• Your business’ name and address
• Your customer’s information
• Goods and Services Tax (GST) registration numbers
• The date you created the invoice
• Invoice identifying number
• Customer’s name and address
• A description of goods and services provided
• Amount payable excluding GST
• The GST rate and total GST
• The total amount payable including GST

If you’re registered for GST, you’ll need to issue a tax invoice when supplying another business that is GST registered. However, if the value of the sale is below $1,000, a simplified invoice will suffice. This includes fewer details so it’s a little easier to prepare.

2. Failing to set clear payment terms

A lack of clear payment terms can lead to confusion and delays. This could occur if you use accounting terminology or leave your due dates up to interpretation.

It’s important to make it clear when a payment is due. For example, if your payment terms are 30 days, make sure to include whether this includes business days only or calendar days. Alternatively, to make it absolutely clear, give the definitive date that your buyer needs to pay you.

Similarly, try to give your customers multiple ways to pay to increase the chances you’ll receive your money promptly. Many businesses in Singapore pay by bank transfer. However, you can also provide the option of digital wallets such as GrabPay or PayLah—just make sure to outline the methods you accept in your invoice.

3. Sending invoices too late or too early

Singaporean businesses need to send invoices within 30 days from the time of supply to comply with the IRAS—provided you’re selling to a GST-registered company.

However, it’s best not to leave things till the deadline. If you send your invoices too late, there’s a risk your customer will deprioritise paying you, which could lead to further delays.

It can also be frustrating for your customers if you send an invoice too early. They may not have had time to test the goods they’ve received. It can also make it harder for them to budget accordingly if they receive the document sooner than expected.

We recommend submitting an invoice 1-2 weeks after you supply your goods or services. This leaves enough time for your customer to plan ahead while still ensuring your agreement is top of mind.

4. Overlooking backup and recordkeeping

Accurate recordkeeping and file backup are essential for all Singaporean businesses, and that extends to your invoices, too. The IRAS requires that all tax invoices be kept for five years. Failure to do so can lead to noncompliance penalties.

Fortunately, recordkeeping is easy with the right software at your disposal. Digital invoicing tools will automatically collate and classify your financial records so they’re accurate and ready for tax time.

As a plus, invoicing software like QuickBooks will speed up your recordkeeping while reducing the possibility of human error. All of this saves you time that you can spend on your other core business tasks.

5. Missing late fees or penalties

Missing late fees may seem like a relatively small mistake on an invoice, but it can have a surprisingly large impact on your cash flow.

Without a late fee, there’s a risk your customer will delay payment, or even dispute the agreement if you attempt to push back and request what you’re owed. This can disrupt your cash flow and, in some cases, lead to complex disagreements.

Make your late payment policy clear on your invoice so there’s no room for conflict. You can also include additional information about this fee in your accompanying email so there are no hidden surprises.

Late fees also give you backing in case of a legal dispute. You have six years to pursue an unpaid debt in Singapore before it becomes irrevocable—these policies act as an extra safeguard that protects you in the worst case scenario.

6. Using outdated or unprofessional invoice templates

Outdated and unprofessional invoices can make your business look untrustworthy and not credible. Fortunately, as far as invoicing mistakes go, this problem is very easy to resolve.

Make sure your invoice is consistent across every client. Include your company name and logo or colours to add some on-brand personality. In Singapore, an orderly and disciplined approach to work is the norm, so make sure your invoice is easy-to-read and concise.

Having one consistent invoice template will save you time, while also making you look more professional in the eyes of your customers. This can go a long way to cultivating trust and credibility.

Need a template to get you started? Here’s a free invoice template to try out for yourself.

7. Hidden charges or fees

No one likes to be charged for something they didn’t expect. A hidden fee can damage trust and lead to payment disputes if you fail to communicate effectively with your customer.

Attempt to keep your invoice as close to the discussed price wherever possible. If you do need to add an extra fee, this is okay provided you discuss it with your customer first.

Reach out and let them know that there will be an extra charge, and provide a reason for the change. Businesses in Singapore value open communication and honesty. This transparency can help you maintain and even strengthen your customer relationships.

How to handle an invoicing mistake: Apologising and correcting the issue

A mistake on an invoice is bound to happen at some point, and that’s okay. As long as you understand how to correct the mistake, you’ll be able to maintain customer relationships that are built on trust.

Here are some steps to take when you find an error:

• Review the invoice: This will help you to identify the mistake.
• Make a note of the error: Either annotate the invoice or attach a separate piece of paper with details of the mistake and how it is being resolved.
• Take action: You may be able to amend the invoice. If that’s not possible, send out a new invoice. A credit note balances the books and reimburses your customer, if that’s applicable.
• Speak to the customer: Inform the customer and apologise. Reassure them that this is a one-off occurrence and won’t happen again.
• Update your records: Make sure that you document the invoice error and any credit notes issued. You should also keep the original invoice for tax purposes.

How to email a client regarding invoice mistakes

If you’re unsure how to apologise for an invoice mistake, an email is usually the best place to start. This will let you explain what happened and reassure your customer that the mistake won’t happen again.

Include the details of the invoice in the subject line of the email. Then, offer a sincere apology for the error. Tell your customer that you understand that the mistake will have caused an inconvenience for them and that you’re committed to fixing it.

Finish the email with an offer for the customer to contact you if they have any questions. You can sign off with your full name and position within the company to add credibility to your message.

5 best practices to avoid invoicing mistakes

Ready to avoid frustrating invoice mistakes? Here are some tips:

Use a standardised template

Use a professional invoice template for consistency. This will portray the kind of professional image that suits your business, and ensures all required information is included in every invoice.

Implement an invoicing system or software

Invest in good quality invoicing software to reduce human errors and ensure timely invoicing. Automated systems save you time doing tasks like calculating GST or inputting customer details.

Set clear payment terms in advance

Make sure all your clients are aware of your payment terms and policies ahead of you issuing invoices—this also applies to late fees and penalties.

Double-check details before sending

Even with an automated system, it’s good practice to double-check all the details on your invoice. Make sure it aligns with the client information that you have on file.

Keep a backup of all invoices

Maintain good records by keeping old invoices for at least five years, in order to be compliant with IRAS regulations. Digital records take up less space and can be accessed from anywhere.

The importance of avoiding invoicing mistakes for business growth in Singapore

Avoiding common invoicing mistakes doesn’t have to be complicated. With the guidance above, you’ll have everything you need to build a professional and trustworthy reputation that keeps your customers coming back.

Need some extra support to make invoicing run more smoothly? QuickBooks takes the challenge out of manual invoicing and recordkeeping, giving you more time to grow your business.

Try a free 30-day trial today and see what our software can do for your business.