Should you send $0 invoice? yep, it’s a thing and it’s brilliant

As a business owner, you’ve probably faced the scenario of an overly enthusiastic client asking for a little extra—perhaps a tweak or fix that wasn’t part of the original deal. You’ve done the work, and while it’s not expensive, it’s time you can’t get back.

What do you do?

Alec Drew, co-founder of the Virtual Business Owners Network and business expert, recently shared a story from the All Ireland Business Summit that highlighted this exact dilemma. After completing a major project for a happy client, Drew’s client continued to ask for small fixes, none of which had been outlined in the contract. Rather than quietly absorbing the cost or outright refusing, Drew had a savvy approach: the zero-dollar invoice.

The magic behind a zero-dollar invoice? It’s not about charging the client; it’s about documenting and showcasing the value of the extra work. Drew would detail the full cost of the extra work—materials, time, etc.—and then add a “Less special discount” line, effectively reducing the cost to $0. This transparent strategy allowed the client to see the true cost of the “free” work, making them less likely to ask for more, while giving Drew a documented record of the added effort for future reference.

What Is a Zero Dollar Invoice?

A zero-dollar invoice is exactly what it sounds like: an invoice with a total of $0. But there’s more to it than just the lack of charge. A zero-dollar invoice can be used to track various scenarios, like:

• Prepayments or credit balances that apply to future services.
• Special discounts or goodwill gestures offered to clients.
• Tracking free work done for promotional purposes or to maintain goodwill.

These invoices ensure clarity, keep records neat, and prevent misunderstandings. They are particularly helpful when offering complimentary services or when a client has prepaid for a series of services, allowing you to keep track of what was delivered, even if no money is exchanged.

When should you send a zero dollar invoice?

You should issue a zero-dollar invoice whenever services or transactions are completed but no payment is due. Some common scenarios where this applies include:

• Complimentary services as part of promotions, rewards, or loyalty programs.
• Correcting billing errors or applying credits to balance an account.
• Tracking time or costs like labor or materials, even if you’re not charging for it.

This kind of invoice keeps both you and your client on the same page, helps you stay organized, and offers an additional layer of transparency to your operations.

How to create a zero dollar invoice

Creating a zero-dollar invoice isn’t just about slapping $0 on a document; it’s about doing it with style and purpose. Here are some tips to make your zero-dollar invoices both professional and impactful:

1. Highlight the Value: Even though it’s $0, list out what you’ve done. Show the client all the work that went into it, as it’s still valuable!
2. Display the Full Price: Show the original price first, and then work your zero-charge magic. It lets the client see the actual value you’ve given them, making the “freebie” feel even more appreciated.
3. Add Personality: Throw in a little note like, “Consider this a thank-you for being awesome!” It keeps things light and fun while maintaining professionalism.
4. Track Your Efforts: Keep a log of all your zero-dollar invoices. This is a good way to reflect on the value you’re providing and potentially identify future revenue opportunities.
5. Turn Scope Creep into a Superpower: If your client keeps adding to the project, document each “free” task with a zero-dollar invoice. This showcases your flexibility and problem-solving skills, turning scope creep into an opportunity.
6. Consistency is Key: Make zero-dollar invoices a habit. They are a great way to track your contributions and ensure that you’re keeping a record of all the extra work you do for clients.
7. Create Conversations: When you send your zero-dollar invoice, use it as an opportunity to talk to your client about the added value you’re providing. This can lead to more “thank yous” and stronger relationships.
8. Look for Future Opportunities: Review your zero-dollar invoices from time to time to spot potential services you could charge for in the future. It’s a great way to find new revenue streams.
9. Professional, with a Side of Fun: Keep your zero-dollar invoices polished and clear, but don’t shy away from adding some fun flair. Make the process enjoyable and engaging for both you and your client.
10. Use it in Contract Renewals: When renewal time comes around, bring up those zero-dollar invoices. They show the client the value you’ve been providing and offer a great chance to discuss future charges for the extra services you’ve been delivering.

Legal and Tax Considerations

While a zero-dollar invoice can be a handy tool for tracking work, it’s important to consider the legal and tax implications:

Goods and Services Tax (GST)

In Australia, the GST is a 10% value-added tax applied to most goods and services. Whether or not you need to include GST on a zero-dollar invoice depends on the nature of the transaction:

• If GST applies: Even if the total on your invoice is $0, you might still need to issue a tax invoice that complies with GST rules. This includes listing the ABN (Australian Business Number), a description of the goods or services, and the GST amount, even though no money is owed.
• No GST: If the service or product is GST-free (such as some educational or medical services), you can issue a zero-dollar invoice without needing to include GST.

Documentation and Reporting

Even if no payment is due, zero-dollar invoices can play a role in your sales reporting and auditing processes. They ensure that all services provided are documented, and they might be helpful in future negotiations, contract renewals, or potential audits.

Zero-dollar invoices are a simple yet effective way to manage your business’s value and ensure transparency, even when you’re offering extra services for free. Whether you’re keeping track of work performed, offering promotional discounts, or simply documenting scope creep, a well-drafted zero-dollar invoice can help protect your business interests while strengthening client relationships. 

Just remember to stay professional, clear, and tax-compliant, and you’ll be using zero-dollar invoices as a strategic tool in no time.

Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. For specific guidance on tax implications of $0 invoices, including GST or other regulatory requirements, please consult a qualified tax professional or accountant familiar with your local tax laws.

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