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Tag: GST Pakistan

  • How to Create Professional Invoices in Pakistan (With Free Template)

    A professional invoice is more than a payment request—it’s a legal document, a reflection of your brand, and for GST-registered businesses in Pakistan, a compliance requirement. This guide covers everything you need to create invoices that get you paid faster while keeping FBR happy.

    What is an Invoice?

    An invoice (or bill/فاکچر) is a commercial document issued by a seller to a buyer detailing the products or services provided, quantities, prices, and payment terms. In Pakistan, invoices serve multiple purposes:

    • Payment Request: Formally asks customers to pay
    • Legal Record: Proof of transaction for disputes
    • Tax Document: Required for GST compliance
    • Accounting Record: Basis for accounts receivable
    • Business Proof: Required for bank loans, tenders

    Invoice vs Receipt vs Bill

    DocumentWhen IssuedPurpose
    InvoiceBefore/at time of saleRequest payment
    ReceiptAfter payment receivedConfirm payment
    BillSame as invoice (informal term)Request payment

    Essential Elements of a Pakistani Invoice

    Every invoice should include these elements:

    1. Your Business Information

    • Business/Company name
    • Complete address
    • Phone number and email
    • NTN (National Tax Number)
    • STRN (Sales Tax Registration Number) – if GST registered
    • Logo (recommended for professionalism)

    2. Customer Information

    • Customer/Business name
    • Address
    • Contact details
    • Customer NTN/STRN (for B2B tax invoices)

    3. Invoice Details

    • Invoice Number: Unique sequential number (e.g., INV-2025-001)
    • Invoice Date: Date of issue
    • Due Date: When payment is expected
    • Reference/PO Number: Customer’s purchase order (if applicable)

    4. Line Items

    • Description of goods/services
    • Quantity
    • Unit price (before tax)
    • Total per item
    • HSN/PCT codes (for certain goods)

    5. Tax Information

    • Subtotal (before tax)
    • GST/Sales Tax amount (shown separately)
    • GST rate applied (18% standard)
    • Other taxes if applicable
    • Grand Total

    6. Payment Information

    • Payment terms (Net 30, Due on Receipt, etc.)
    • Accepted payment methods
    • Bank account details (for bank transfer)
    • JazzCash/Easypaisa numbers (if applicable)

    FBR Tax Invoice Requirements

    For GST-registered businesses, FBR mandates specific invoice requirements:

    • Seller’s name, address, and STRN
    • Buyer’s name, address, and STRN (for registered buyers)
    • Date of issue
    • Description of goods/services
    • Quantity and value
    • Amount of sales tax charged (separately shown)
    • Total value including tax
    • Unique serial number

    Important: Invoices not meeting these requirements may not be accepted for input tax credit claims by your customers.

    How to Calculate GST on Invoices

    Adding GST to Price

    If your price is Rs. 10,000 (exclusive of tax):

    • GST (18%) = Rs. 10,000 × 0.18 = Rs. 1,800
    • Total Invoice = Rs. 11,800

    Extracting GST from Inclusive Price

    If total is Rs. 11,800 (inclusive of tax):

    • Taxable Value = Rs. 11,800 ÷ 1.18 = Rs. 10,000
    • GST = Rs. 11,800 – Rs. 10,000 = Rs. 1,800

    Modern accounting software handles these calculations automatically.

    Creating Invoices: Three Methods

    Method 1: Word/Excel Templates

    Pros: Free, flexible, familiar

    Cons: Manual calculations, no tracking, error-prone

    Best for: Very small businesses with few invoices monthly

    Steps:

    1. Download a template or create your own
    2. Add your business details (save as master template)
    3. For each invoice: copy template, fill in customer and item details
    4. Calculate totals and GST manually
    5. Save as PDF and send to customer
    6. Track payment status separately

    Method 2: Online Invoice Generators

    Pros: Free, professional templates, some tracking

    Cons: Limited customization, may lack Pakistan GST support

    Best for: Freelancers, service providers with moderate volume

    Method 3: Accounting Software

    Pros: Automatic calculations, GST compliance, payment tracking, financial reports, customer history

    Cons: Monthly cost

    Best for: Any business serious about getting paid and staying compliant

    With software like HysabOne:

    1. Select customer (auto-fills their details)
    2. Add items from your product list
    3. GST calculates automatically
    4. Send via email or WhatsApp directly
    5. Track payment status in dashboard
    6. Automatic reminders for overdue invoices

    Invoice Best Practices

    For Faster Payment

    • Invoice Immediately: Send invoice same day as delivery/service
    • Clear Due Date: “Due by 15 Jan 2025” not “Net 30”
    • Easy Payment Options: Bank transfer, JazzCash, Easypaisa details
    • Professional Appearance: Clean design builds trust
    • Follow Up: Polite reminder before and after due date

    For Compliance

    • Sequential Numbers: No gaps in invoice numbers
    • Separate GST: Always show tax amount separately
    • Complete Details: All FBR-required fields
    • Keep Records: Maintain copies for minimum 6 years

    Common Mistakes to Avoid

    • Missing or incorrect STRN/NTN
    • GST calculation errors
    • Unclear payment terms
    • Sending invoices late
    • Not following up on overdue payments
    • Inconsistent invoice numbering

    Sending Invoices in Pakistan

    Email

    Professional and provides delivery proof. Always send as PDF attachment with brief message.

    WhatsApp

    Very common in Pakistan. Quick delivery and read confirmation. Send PDF attachment, not just image.

    Physical Copy

    Still required for some government/corporate clients. Keep signed delivery acknowledgment.

    Frequently Asked Questions

    Is invoice mandatory in Pakistan?

    For GST-registered businesses, issuing tax invoices is mandatory by law. For unregistered businesses, invoices are not legally required but are essential for proper record-keeping, customer relationships, and professionalism.

    What is the difference between tax invoice and regular invoice?

    A tax invoice is issued by GST-registered businesses and includes STRN, shows GST separately, and enables the buyer to claim input tax credit. A regular invoice may not include these elements and cannot be used for GST credit claims.

    How do I add GST on an invoice?

    Calculate your subtotal, multiply by 0.18 (for 18% GST), and add to get the grand total. Always show the GST amount as a separate line item. Example: Subtotal Rs. 10,000 + GST Rs. 1,800 = Total Rs. 11,800.

    Can I send invoice via WhatsApp legally?

    Yes, electronic invoices sent via WhatsApp, email, or other digital means are legally valid in Pakistan. The medium doesn’t matter as long as the invoice contains all required information. Send as PDF for best results.

    What is the difference between invoice and receipt?

    An invoice is issued to request payment (before payment is made). A receipt is issued after payment to confirm it was received. Issue invoice first, then receipt once paid.

    Conclusion

    Professional invoicing is fundamental to business success. It affects how quickly you get paid, your legal compliance status, and how customers perceive your business. Invest time in setting up proper invoicing—whether through templates or accounting software—and maintain consistency.

    For GST-registered businesses, proper invoicing isn’t optional—it’s a legal requirement with real penalties for non-compliance. Modern software makes compliance easy while saving hours of manual work.

    Ready to create professional invoices in seconds? Try HysabOne with built-in GST-compliant invoicing, WhatsApp sharing, and automatic payment tracking.

  • GST in Pakistan: Complete Guide for Small Businesses (2025)

    GST (General Sales Tax) in Pakistan is a value-added consumption tax administered by the Federal Board of Revenue (FBR). Levied at a standard rate of 18% on most goods and services, GST is a critical compliance requirement for Pakistani businesses. Understanding GST is essential for legal operation, avoiding penalties, and maintaining healthy business finances.

    What is GST in Pakistan?

    GST (also called Sales Tax at the federal level) is an indirect tax charged on the supply of goods and services in Pakistan. It’s a consumption tax—ultimately paid by the end consumer but collected and remitted by businesses at each stage of the supply chain.

    The tax works on a value-added principle: businesses charge GST on sales (output tax) and claim credit for GST paid on purchases (input tax). The difference is remitted to FBR.

    Current GST Rates in Pakistan (2025)

    CategoryRateExamples
    Standard Rate18%Most goods and services
    Reduced Rate10%Some food items, solar panels
    Zero Rate0%Exports, certain agricultural inputs
    ExemptN/ABasic food staples, healthcare, education
    Extra Tax1-3%Non-filers additional tax

    Note: Rates may change. Always verify current rates from FBR’s official sources.

    Who Needs to Register for GST?

    Mandatory Registration

    You must register for GST if:

    • Annual taxable turnover exceeds Rs. 10 million
    • You are an importer of goods
    • You are a manufacturer (regardless of turnover)
    • You supply goods to registered persons and want them to claim input tax
    • You are a retailer in a Tier-1 area with annual turnover exceeding Rs. 10 million

    Voluntary Registration

    Even if below thresholds, you may benefit from voluntary registration:

    • Claim input tax credits on purchases
    • Appear more professional to B2B customers
    • Avoid extra tax when buying from registered suppliers
    • Required for many government tenders

    GST Registration Process

    For detailed step-by-step instructions, see our GST registration guide. Here’s the overview:

    Step 1: Create IRIS Account

    Visit FBR’s IRIS portal (iris.fbr.gov.pk) and register for an account using your CNIC.

    Step 2: Gather Required Documents

    • CNIC copy
    • NTN (National Tax Number)
    • Bank account details
    • Business address proof (utility bill, rent agreement)
    • Business registration documents (if applicable)
    • Partnership deed or company documents (for non-sole proprietors)

    Step 3: Submit Application

    Complete the online form with business details, upload documents, and submit.

    Step 4: FBR Verification

    FBR may conduct physical verification of your business premises. Ensure business is operational and records are organized.

    Step 5: Receive STRN

    Upon approval, you receive a Sales Tax Registration Number (STRN). Display this on invoices and at your business premises.

    How to Calculate GST

    Basic Formula

    GST Amount = Taxable Value × 18%

    Example: Selling goods worth Rs. 10,000:

    • GST = 10,000 × 18% = Rs. 1,800
    • Total Invoice = Rs. 11,800

    Reverse Calculation (Extracting GST from Total)

    If you have a GST-inclusive price and need to extract GST:

    GST = Total Amount × (18/118)

    Example: Total Rs. 11,800:

    • GST = 11,800 × (18/118) = Rs. 1,800
    • Taxable Value = Rs. 10,000

    Input vs Output Tax

    Output Tax: GST you charge on sales

    Input Tax: GST you pay on purchases

    GST Payable = Output Tax – Input Tax

    Example:

    • Monthly Sales: Rs. 500,000 (Output Tax: Rs. 90,000)
    • Monthly Purchases: Rs. 300,000 (Input Tax: Rs. 54,000)
    • GST Payable: Rs. 90,000 – Rs. 54,000 = Rs. 36,000

    GST Invoicing Requirements

    A proper tax invoice must include:

    • Invoice number and date
    • Your business name, address, and STRN/NTN
    • Customer details (name, STRN if registered)
    • Description of goods/services
    • Quantity and unit price
    • Taxable value
    • GST amount (separately shown)
    • Total amount

    Learn how to create proper invoices in our invoice creation guide.

    GST Filing and Returns

    Monthly Returns

    GST returns must be filed monthly by the 18th of the following month. Late filing attracts penalties.

    Return Forms

    • Sales Tax Return: Main monthly return showing sales, purchases, output/input tax
    • Annexures: Detailed breakdowns of invoices, purchases from registered/unregistered persons

    Electronic Filing

    All returns are filed electronically through IRIS portal. Keep digital records of all invoices as they may be selected for audit.

    Common GST Mistakes to Avoid

    • Late Filing: Penalties of Rs. 5,000-25,000 plus interest on unpaid tax
    • Incorrect Calculations: Always double-check GST math—errors trigger audits
    • Not Claiming Input Tax: You’re entitled to claim GST paid on business purchases
    • Missing Documentation: Keep all invoices for minimum 6 years
    • Charging GST on Exempt Items: Know what’s exempt vs taxable
    • Not Verifying Supplier STRN: Verify suppliers’ registration to claim input tax

    How Accounting Software Simplifies GST

    Modern accounting software dramatically simplifies GST compliance:

    • Automatic Calculation: GST computed correctly on every invoice
    • Tax Reports: Generate input/output tax reports instantly
    • STRN Verification: Some software integrates with FBR to verify supplier registration
    • Return Preparation: Data organized in return format for easy filing
    • Audit Trail: Complete record of all transactions for audit purposes

    HysabOne is designed specifically for Pakistani FBR compliance requirements.

    Frequently Asked Questions

    What is the GST rate in Pakistan 2025?

    The standard GST rate in Pakistan is 18% on most goods and services. Reduced rates of 10% apply to certain items. Some goods are zero-rated (exports) or exempt (basic food, healthcare).

    Is GST registration mandatory for small businesses?

    GST registration is mandatory if annual taxable turnover exceeds Rs. 10 million, or if you are a manufacturer/importer regardless of turnover. Below threshold, registration is voluntary but may be beneficial for claiming input tax.

    How do I register for GST in Pakistan?

    Register through FBR’s IRIS portal (iris.fbr.gov.pk) by creating an account, submitting required documents (CNIC, NTN, business proof), and completing the online application. FBR may conduct physical verification before issuing STRN.

    What is the GST threshold in Pakistan?

    The registration threshold is Rs. 10 million annual taxable turnover. However, manufacturers and importers must register regardless of turnover. Retailers in Tier-1 cities also have specific thresholds.

    When are GST returns due in Pakistan?

    GST returns are due monthly by the 18th of the following month. For example, January’s return must be filed by February 18th. Late filing attracts penalties and interest.

    Can I claim input GST on all purchases?

    Input tax can be claimed on taxable purchases made from GST-registered suppliers with valid tax invoices. Purchases from unregistered persons or for exempt supplies generally cannot be claimed as input tax.

    Conclusion

    GST compliance is not optional for qualifying Pakistani businesses—it’s a legal requirement with significant penalties for non-compliance. However, with proper understanding and systems in place, GST management becomes routine.

    The key is maintaining accurate records, filing on time, and understanding your input tax entitlements. Proper accounting software transforms GST from a compliance burden into an automated process.

    Need help managing GST for your business? HysabOne is designed specifically for Pakistani tax requirements—try it free and simplify your GST compliance today.

  • What is Accounting Software? Complete Guide for Pakistani Businesses (2025)

    Accounting software is a digital solution that automates the recording, processing, and reporting of financial transactions for businesses. For Pakistani SMEs, accounting software has become essential—replacing manual ledgers and spreadsheets with efficient systems that handle invoicing, expense tracking, GST calculations, and financial reporting in Pakistani Rupees (PKR).

    What Does Accounting Software Do?

    Accounting software performs the core functions of financial management that Pakistani businesses traditionally handled with paper registers and calculators. Modern accounting solutions automate these tasks while ensuring FBR compliance:

    • Records Transactions: Automatically captures sales, purchases, payments, and receipts
    • Generates Invoices: Creates professional GST-compliant invoices with your NTN
    • Tracks Expenses: Categorizes and monitors all business expenditures
    • Manages Receivables/Payables: Tracks udhar (credit) given to customers and owed to suppliers
    • Produces Financial Reports: Generates profit & loss, balance sheets, and cash flow statements
    • Calculates GST: Automatically computes Sales Tax and generates FBR-ready reports
    • Bank Reconciliation: Matches your records with bank statements

    Why Pakistani Businesses Need Accounting Software

    The business landscape in Pakistan is rapidly digitizing. With FBR’s push toward documentation and the GST compliance requirements, manual accounting is becoming increasingly difficult. Here’s why Pakistani SMEs are switching to software:

    Time Savings

    A typical shopkeeper spends 2-3 hours daily on manual bookkeeping. Accounting software reduces this to 15-20 minutes. For a business processing 50+ transactions daily, this translates to saving 60+ hours monthly—time better spent on growing your business.

    Error Reduction

    Manual calculations lead to errors. A single decimal mistake in your ledger can create reconciliation nightmares. Software eliminates arithmetic errors and catches data entry mistakes through built-in validation.

    FBR Compliance

    Pakistan’s Federal Board of Revenue requires proper documentation for GST-registered businesses. Accounting software automatically calculates Sales Tax, maintains proper records, and generates reports needed for GST filing.

    Real-Time Business Visibility

    Know your exact profit, cash position, and outstanding receivables at any moment. No more waiting until month-end to understand how your business is performing.

    Types of Accounting Software in Pakistan

    Desktop Accounting Software

    Traditional software installed on your computer. Data is stored locally. Examples include Tally and QuickBooks Desktop. While reliable, these solutions have limitations—data is accessible only from one computer, and backups are your responsibility.

    Cloud Accounting Software

    Cloud-based accounting runs on internet servers and is accessed through web browsers or mobile apps. Your data is automatically backed up, accessible from anywhere, and multiple users can work simultaneously. This is the fastest-growing category in Pakistan.

    Industry-Specific Solutions

    Some software is designed for specific industries. Retail accounting software includes POS features, while distribution software handles complex inventory and route management.

    Key Features to Look For

    When evaluating accounting software for your Pakistani business, prioritize these features:

    GST/Sales Tax Management

    The software should automatically calculate 18% GST (or applicable rates), maintain input/output tax records, and generate returns-ready reports. This is non-negotiable for registered businesses.

    Multi-Currency Support

    If you deal with imports/exports or have foreign suppliers, the software should handle USD, AED, CNY, and other currencies with automatic conversion to PKR.

    Invoicing in Urdu/English

    Many Pakistani businesses need bilingual invoices. Look for software that supports both Urdu and English for customer-facing documents.

    Inventory Integration

    For trading and retail businesses, accounting should integrate with inventory management. When you sell an item, stock should update automatically.

    Mobile Access

    Check your business performance from anywhere. Mobile apps let you approve invoices, check balances, and monitor sales while away from the shop.

    Pakistani Bank Integration

    Some software can connect directly to Pakistani banks (HBL, MCB, UBL, etc.) for automatic transaction import, making bank reconciliation effortless.

    Accounting Software Costs in Pakistan

    Software pricing in Pakistan varies widely:

    CategoryMonthly Cost (PKR)Best For
    Free OptionsRs. 0Very small businesses, startups
    Basic CloudRs. 2,000 – 5,000Small shops, service providers
    Mid-RangeRs. 5,000 – 15,000Growing SMEs, multiple users
    EnterpriseRs. 25,000+Large businesses, complex needs

    Consider the total cost of ownership—not just the subscription. Factor in implementation, training, and potential productivity gains.

    Popular Accounting Software Options in Pakistan

    The Pakistani market offers several options. See our detailed comparison of the best accounting software in Pakistan for in-depth analysis. Key players include:

    • HysabOne: Cloud-based ERP designed specifically for Pakistani SMEs with full GST support
    • QuickBooks: International solution with local adaptations
    • Tally: Popular desktop option in the subcontinent
    • Xero: Modern cloud platform gaining traction
    • Odoo: Open-source option for tech-savvy businesses

    How to Choose the Right Software

    Follow this framework when evaluating options:

    1. List Your Requirements: What features do you absolutely need? GST, inventory, payroll?
    2. Set Your Budget: What can you afford monthly/annually?
    3. Check Compatibility: Does it work on your devices? Do you have reliable internet for cloud?
    4. Request Demos: Never buy without seeing the software in action with your data
    5. Verify Support: Is support available in Urdu? What are response times?
    6. Start with Trial: Most good software offers free trials—use them

    Getting Started: Implementation Steps

    Successfully implementing accounting software requires planning:

    1. Set Up Chart of Accounts: Configure your chart of accounts to match your business structure
    2. Enter Opening Balances: Input your current receivables, payables, and bank balances
    3. Add Products/Services: If selling goods, set up your inventory items
    4. Configure Tax Settings: Set up GST rates and your NTN
    5. Train Your Team: Ensure everyone who’ll use the software is properly trained
    6. Run Parallel: Keep manual records alongside software for the first month

    Common Mistakes to Avoid

    • Choosing Based on Price Alone: The cheapest option may cost more in lost time and errors
    • Ignoring Training: Software is only as good as the people using it
    • Not Backing Up: Even cloud software users should export periodic backups
    • Delaying Implementation: The best time to start was yesterday; the second best is today

    Frequently Asked Questions

    What is the best accounting software in Pakistan?

    The best accounting software depends on your business size and needs. For Pakistani SMEs, cloud solutions like HysabOne offer the best combination of features, local support, and GST compliance. See our detailed comparison for specific recommendations.

    How much does accounting software cost in Pakistan?

    Accounting software in Pakistan costs between Rs. 2,000 to Rs. 25,000+ per month depending on features and business size. Basic cloud solutions start around Rs. 2,000-5,000 monthly, while enterprise solutions with advanced features cost Rs. 25,000 or more.

    Can accounting software handle GST calculations automatically?

    Yes, modern accounting software automatically calculates GST (Sales Tax) on invoices, tracks input and output tax, and generates FBR-compliant reports. This is a standard feature in software designed for Pakistani businesses.

    Is cloud accounting software safe for Pakistani businesses?

    Reputable cloud accounting providers use bank-level encryption and security measures. Your data is often safer in the cloud than on a local computer susceptible to theft, damage, or ransomware. Always choose providers with proper security certifications.

    Do I need accounting knowledge to use accounting software?

    Modern software is designed for business owners, not accountants. User-friendly interfaces guide you through common tasks using plain language. However, basic understanding of bookkeeping concepts helps you use the software more effectively.

    Can I switch from Excel to accounting software?

    Absolutely. Most software allows importing data from Excel. While there’s a learning curve, the long-term benefits far outweigh the initial effort. See our guide on upgrading from Excel to proper accounting software.

    Conclusion

    Accounting software has transformed from a luxury to a necessity for Pakistani businesses. With FBR’s increasing documentation requirements, rising competition, and the need for real-time business insights, manual bookkeeping simply cannot keep up.

    The right accounting software saves time, reduces errors, ensures compliance, and provides the visibility needed to make smart business decisions. Whether you’re a small shopkeeper in Lahore or a growing distributor in Karachi, there’s a solution that fits your needs and budget.

    Ready to modernize your business finances? Try HysabOne free and experience the difference that proper accounting software makes for Pakistani businesses.