Deprecated: Methods with the same name as their class will not be constructors in a future version of PHP; plgContentOsecontent has a deprecated constructor in /home/creditri/public_html/plugins/content/osecontent/osecontent.php on line 31

A common mistake many businesses make is issuing an invoice to a business name.

Written by

Who is paying the invoice?
Often an invoice is disputed because it has been sent to the wrong person or written out to the wrong entity.
Make sure the entity you are dealing with is an enforceable entity, we often see invoices made out to entities that cannot be sued.

As you know, invoicing is one of the most important elements for getting paid for the work you have done, making it important that you are issuing them to an enforceable entity.
A common mistake many businesses make is issuing an invoice to a business name.
Now, I can hear you saying 'what’s wrong with that?'.

Well a business name is not a legal entity, ASIC Manages business names and when you search on their website it applies ABN numbers to them, but the ABN belongs to the legal entity that owns the business name. This may be a PTY LTD Company or an individual, it may even be an association, no matter what it will be owned by a legal entity.
You need to think of the business name as an alias or a nickname.

On your contracts and invoices make sure you are addressing the full legal entity, plus the names of the directors, trustees and people who the entity is associated.

Ok, now I have mentioned trustees, trusts are another problem and are set up for various reasons. The important thing to realise here is that a trust is also not a legal entity and again like a business name they cannot be sued. It is the trustees that are the legal entity and their names are what must be on your contracts and invoices.

This is another common problem for businesses, in particular for accountants as they may be preparing taxation, financial planning and various services for trust, super funds or businesses and invoicing to the same, however again none of these are enforceable entities and cannot be sued, ensure your contracts and invoices are contracted to the correct entity. When you are working for these types of entities you still must invoice the original owner of the entities.

I know this is a big problem when it comes to enforcing payment, so ensure you are billing, invoicing and signing up a legal entity that is enforceable.
The simple way to avoid this is to check on ASICs website that the name on your contract is a legal entity before going ahead with any work and then invoice that entity.

3 common mistake businesses make with invoicing:

  1. They don’t check ABN numbers or the entity on ASIC
  2. The invoices don’t match the contracted entity
  3. There is not process for updating information on a regular basis.

Case study:
We recently had a client come to us who was a graphic designer and printing firm, they had a client sign up for a job, they did a job for them under the name on the contract and that was all good.

The same person came back and asked for more work to be done, for two addition jobs but they were for different companies and they asked to have the invoices made out to the separate companies. The graphic design and printing company never got them to complete new contracts for the two additional companies. When it came time to pay there was an argument over who was being billed.

They went to court and because there was no contract he only got a portion of his money back and that was from the entity on his contract. It just goes to show that when you get a job, double check who is paying the bill.

Learn the key elements to making sure you get paid for the work you've done.

Haven't signed up yet? Really?! Well, here's what your missing out on...

  • Full Access to The Seven Steps to BCA Debt in your Business and the 7 Lesson in Accounts Management. +

    There are 7 steps that we walk you through, these steps build your accounts management system which ensures you get paid for the work you have done and you know your customers have the ability to pay you before you do any work for them. Read More
  • Terms and Conditions +

    We walk you through this process to ensure you have the ultimate Terms and Conditions, customised to suit your business. Read More
  • The Debt Recovery Blitz +

    Get your money back into your bank account, we will help you increase cash flow from within your debtors ledger. Read More
  • Core Policy Document Suite +

    You we give you a suite of documents designed to support your Accounts Management System, everything you need to raise your standards in customer service. Read More
  • Current Customer Induction +

    These are your business ambassador’s show them how you you are improving your systems and ultimately the service you provide them.
  • Collateral Update +

    Ok, this is all the annoying little jobs that need to be done, like update the website T&C and Privacy Policies. We have streamlined this for you and give you the html docs to get your web developers to upload. Read More
  • Secure your Assets +

    We help you determine if your business would benefit from the Personal Property Securities Register, which can put you on equal footing with secured creditors like the banks. Read More
  • Debtor Management 2.0 ??? +

    Make sure your customers have the ability to pay you before you have even done any work for them. Read More
  • 1

In a recent survey my clients
identified having a system for

Accounts Management

to be one of the top area's
they struggled with.