Okay so either you have a problem with a particular invoice, either it’s:

• A duplicate invoice
• An invoice that will not be paid by the customer (for various reasons) or
• You chose to cancel the invoice (you gave the service or product to the customer instead of them paying it)

As it is good business practice to keep a complete record of all transactions, invoices (and their numbers) should also be retained.  Because of this,  it’s better to void invoices instead of deleting them.

If you delete the invoice then someone at some point will say “What happened to invoice #1234?”.

If they were able to lookup invoice #1234 and see that it has been voided, preferably with a note to say why it was voided, that’s better than having a completely missing record.

If you’ve already received payment against that invoice, don’t void the invoice. Instead, issue a credit memo or a refund to adjust the transaction.

There are three main ways a business owner can be paid:

1) Draw from the business bank account. This is treated as a loan and interest needs to be paid back to the business.
2) Draw from the business bank account in the form of shareholder dividends. The business owner then pays tax on the dividends.
3) Get paid as an employee of the business, like any other employee.

A good article can be found here on:

http://www.intuit.com.au/r/money/paying-yourself-a-salary-will-pay-off/

Option 1 (as above) – “In Australia, this strategy is viewed as the shareholder taking a loan against the company and results in the ‘loan’ being treated as unfranked dividends. The shareholder pays tax on the amounts withdrawn at their applicable tax rate. Find out more about unfranked dividends on the ATO’s website. Drawing up a formal loan agreement will help you avoid this pesky unfranked dividend situation, but you’ll have to pay interest back to your company and you’ll still pay tax on the cash – just over a longer period.”

Option 2 (as above) – “… shareholder dividends, which means you’ll need to declare the dividend as income and pay tax on the gross value of the dividend at its tax bracket. A franking credit can also decrease the tax payable on dividends by 30%. However, extra tax may be payable on benefits, such as the Medicare levy, depending on which marginal tax rate the owner is paying. In the event the owner ends up paying an income tax bill (instead of having their tax paid through the company), they have to pay PAYG instalments tax.”