Contractor invoice guide

What to put on a contractor invoice

• Your business name, address, phone and email, plus any license or registration number your trade or area requires on your paperwork.
• The client's name and billing address, and the job site address if it's different.
• A unique invoice number, the invoice date and the payment due date.
• A job reference, such as the estimate or quote number, purchase order or work order, so the client can match the invoice to what they approved.
• A short description of the work and the dates it was done.
• Separate lines for labor, materials, equipment and other costs, each with a quantity, rate and amount.
• The subtotal, any discount, tax if it applies, and the total due.
• Your payment terms and how to pay.

For the details every invoice should show, whatever the work, see what to include on an invoice.

How to bill labor, materials and equipment

• Labor. Bill by the hour or as a fixed price per stage, as agreed in your estimate. For hourly work, show the hours, the rate and the dates; give each trade or rate its own line.
• Materials. List the main materials with quantities and unit prices, so the client can check them against the estimate. Small consumables can share one line. If you add a markup, agree it with the client beforehand.
• Equipment. Show rented equipment with the rental period, such as days or weeks. If you charge for your own equipment, name it and say how it's charged.
• Other costs. Give permits, waste disposal, travel and similar charges their own lines, so nothing is hidden in the labor rate.
• Change orders. Bill work added after the estimate on separate lines that name the change order or the date it was approved.

Two contractor invoice examples

The businesses and figures below are fictional, and the amounts are before tax. For invoices with many lines, the Compact template fits more items on each page.

Whether labor, materials or both are taxed depends on where the work is done. The invoice generator works out tax from the one rate you enter for the invoice, so check how each part of the job is treated where you work before you add it.

Deposits, progress payments and terms

• Deposits. Bill a deposit as its own invoice before the work starts. On the final invoice, bill the remaining balance on a line that names the deposit invoice, so nothing is paid twice.
• Progress billing. On longer jobs, invoice at agreed stages or for a share of the contract price, and say which stage each invoice covers.
• Retention. Some contracts hold back a percentage of each payment until the work is complete, often called retainage or retention. If yours does, follow its terms and keep track of the amounts held back.
• Payment terms. State when payment is due, such as Net 15 or Net 30 days from the invoice date, or due on receipt for small jobs, and how the client can pay.
• Late fees. Charge them only if they were agreed in advance and state them on the invoice. What you may charge depends on where you work.

Common contractor invoicing mistakes

• Vague descriptions. “Work completed” as one lump sum is harder to check and approve than labor, materials and equipment on separate lines.
• No job reference. Without the estimate, purchase order or site address, the client's accounts team may not be able to match the invoice.
• Billing unapproved extras. Work outside the estimate is easier to dispute. Get change orders approved in writing and name them on the invoice.
• Losing track of deposits and stages. Name earlier invoices when you bill a balance or the next stage, so the client can see what's already been paid.
• Invoicing late. Send the invoice as soon as the job or stage is complete, while the details are fresh for both of you.