If you're self-employed in Canada — whether you're a contractor, freelancer, tradesperson, or running a side business — you're likely operating as a sole proprietor. It's the simplest business structure in Canada, and it comes with straightforward invoicing requirements that don't require an accountant to figure out.
Do you need to register a business to invoice clients?
No. As a sole proprietor operating under your own legal name, you can invoice clients immediately without registering a business name. If you want to operate under a business name — for example, "John's Painting Services" instead of "John Smith" — you'll need to register that name with your provincial government. In Ontario this is done through the ServiceOntario website and costs around $60.
Either way, you can start invoicing clients right now. Your legal name is sufficient for a valid invoice.
What goes on a sole proprietor invoice
A proper invoice from a sole proprietor should include:
- Your full legal name or registered business name
- Your contact information — address, phone, and email
- Your client's name and contact information
- A unique invoice number for your records
- The date the invoice was issued
- A clear description of the work completed
- The amount charged for each service or product
- Any applicable taxes
- The total amount due and your payment terms
If you are registered for GST/HST, you must also include your GST/HST registration number on every invoice you issue.
When do you need to charge GST or HST
You are required to register for GST/HST and collect it from clients once your total taxable revenues exceed $30,000 CAD in a calendar year or in any single calendar quarter. Before you reach that threshold you are a "small supplier" and are not required to charge GST or HST, though you can register voluntarily if you choose.
Once registered, the rate you charge depends on where your client is located. Clients in Ontario pay 13% HST. Clients in Alberta pay 5% GST only. Clients in Nova Scotia, New Brunswick, Newfoundland, and PEI pay 15% HST. Always apply the rate for the province where the service was delivered or where your client is based.
How to number your invoices
There is no legal requirement for how you number invoices in Canada, but sequential numbering is strongly recommended for your own record-keeping and for any CRA audit. A simple format like INV-0001, INV-0002 works perfectly. The important thing is that every invoice has a unique number and that your numbering is consistent.
Keep a copy of every invoice you issue. The CRA requires you to retain business records for at least six years. A digital PDF copy stored in your account is acceptable — you do not need paper copies.
Getting paid faster
Three things make the biggest difference in how quickly clients pay:
- Set clear payment terms. "Net 30" means payment is due within 30 days. For smaller jobs, "Net 14" or "Due on receipt" is reasonable. Always state this on your invoice.
- Invoice promptly. Send the invoice the same day you complete the work, or at most within 24 hours. The longer you wait to invoice, the longer you wait to get paid.
- Follow up on time. If a payment is approaching its due date, send a short reminder. It is completely normal in business and clients generally expect it.
Keeping records as a sole proprietor
As a sole proprietor your business income is reported on your personal tax return using a T2125 form. You'll need a record of all revenue you invoiced during the year and all eligible business expenses. Keeping your invoices organized throughout the year makes this straightforward at tax time.
You don't need accounting software for this. A simple record of every invoice you issued, with the date, client, amount, and whether it was paid, is enough to complete your tax return accurately.
InvoiceNow keeps all of this organized automatically. Every invoice you create is saved to your account with its status — Draft, Sent, or Paid — so your records are always up to date without any extra work.