What is a Construction Invoice and How To Create One Easily
December 13, 2022
If you’re working on a construction project, you need to provide your clients with a construction invoice. This is an extremely important document that outlines some crucial things they need to know about the project they contracted you for.
But how do you create an accurate construction invoice?
We’ll break down the importance of these documents and show you how to get them hassle-free with an online generator!
What is a Construction Invoice?
A construction invoice is a document that construction companies send to clients once the project they’ve been hired for is complete. It specifies the services you provided to the client, breaks down the contractor payments, and serves as a written record of the purchase agreement.
Usually, a typical construction invoice includes the following:
- The date the invoice was created
- Contact information of both parties
- Descriptions of services
- Quantity and the price of the goods used for the services
- Pricing and payment details
Most importantly, the IRS requires employers to have a construction invoice so that both you and your clients can be aware of all the taxes, benefits, and payments included.
What Documents Aren’t Considered a Construction Invoice
Now that you know what a construction invoice is, you should get familiar with other legal documents that people commonly mix up with this document, such as:
- Purchase orders. These documents are used before any transaction related to the ongoing project is made. Essentially, they are used for keeping records of the customer’s order, while the construction invoice is a record of the payment terms and the receipt of the products and services used.
- Payment applications. These are formally written documents that, like construction invoices, are used when the project is completed. They consist of documents that outline the release of payments, which are to be applied to an account balance.
- Verbal requests. This one is obvious, but people often think that negotiating about the payment terms can be a substitute for a construction invoice. However, legal agreements should always be put into writing.
What Should a Construction Invoice Include?
Every company has its own invoicing practices, but generally, a construction invoice should include the following elements:
#1. Company and Contractor Information
First and foremost, your client needs to know who is sending them the invoice. That’s why you need to enter the following information:
- Your company’s name
- Email and street addresses
- State, city, and ZIP code
- Phone numbers
Besides your company’s information, you also need to fill in the basic information on your client, such as name, email, place of residence, etc.
Bonus points: If you want your construction invoice to look sleek and professional, you should add your company’s logo to it.
#2. The Date and Invoice Number
Once you fill in the basic information, you need to add the date when the invoice was issued and an invoice number. The latter is particularly important, as some clients won’t accept an invoice without it.
Both the date and the number of the construction invoice will help you keep track of the paperwork later on, especially when you’re handling the payroll.
#3. Project Information
Project information is one of the central parts of your construction invoice. It needs to specify the basic information regarding the project you’re working on, such as:
- The location of the construction site
- The name of the sponsors of the project
- Expected date of completion
- Completed work and time put in
- Products and materials used for the job
You don’t have to write down the project specifics, such as work needed to complete the project or the estimated costs, as that will be mentioned later on in the invoice. This section basically needs to provide your client with a brief rundown of the job.
#4. Required Materials
In this section, you should specify:
- Details of the material required for the construction process
- The individual price of all the required materials
- The quantity of the required materials
Based on this information, you also need to calculate the lump sum for the materials.
Before you add payment details to your construction invoice, you need to add up the price of all the materials, the labor, and other costs of the project. After that, you should also mention discounts and taxes.
This section should provide your client with a clear breakdown of the costs so that they know exactly what to expect.
#6. Payment Details
Last but not least, you need to list all important details regarding the payment. You should state whether the payment will be broken down into installments, whether there are any discounts, and what the expected payment timeline should be.
In this section, you can also include any specific payment terms you have, penalties for late payment, or any other payment-related details you can think of.
How to Make a Construction Invoice
When it comes to creating a construction invoice, you can either write one yourself or use an online generator. The former option is quite time-consuming, and on top of that, it can produce some errors, as you would be doing all the calculations manually.
If you want to make a construction invoice without worrying about any errors and in the shortest time possible, you should use an invoice template generator. This way, you’ll get a completed, top-notch document that is customized to your preferences and needs in no time.
All you have to do is:
- Visit the invoice generator page
- Fill in the required details
- Proceed to checkout and download your document
Benefits of Using a Construction Invoice Template
Using a construction invoice template is generally considered the superior method of creating this document because it:
- Gives your company a professional look: Invoice templates look professional, clean, and organized, which will make any contractor or project owner respect your business more.
- Leaves no opportunities for mistakes. A construction invoice template essentially minimizes the chances of any errors happening. There are fewer opportunities for you to make a mistake, as the template has its layout—all you have to do is enter the required information in the empty fields.
- Makes invoices tracking easier. When you use a template, your invoices will look pretty much the same. This will make invoice tracking easier and allow you to scan dates, contact numbers, and other important information much faster.
Best Practices for Reviewing Your Construction Invoice
Even if you're using an invoice generator, you might make a mistake when entering the data. Here are some tips for reviewing your invoice to make sure everything goes according to plan.
#1. Confirm Your Company’s Contact Information
The first thing you need to do when reviewing your construction invoice is to verify your company’s contact information. It needs to line up with the information in the contract documents.
This step is rather important in cases where there is a change in ownership during the project.
#2. Double Check the Payment Details
When generating construction invoices, you will need to enter the payment details of every contractor separately. This means that you will have to type in the credit card numbers, discounts, tax rates, and other important numbers time and time again.
That’s why you should double-check every digit and letter—you don’t want to underpay anyone or leave a bad impression on a new contractor.
#3. Verify the Work Performed
Lastly, once you’ve checked the payment details and confirmed your company’s information, you should verify that the job has been completed correctly before issuing the invoice.
Inspect the job site thoroughly and compare the scope of work done there with the work agreed to in the document.
Although making a construction invoice might seem like a daunting task at first, it doesn’t have to be if you take advantage of an online invoice generator. By using one, you’ll save your precious time, and on top of that, you’ll minimize the chances of making an error when filling out the paperwork.
If you’re looking for an affordable solution, look no further—we might have just what you need! Our construction invoice template is easy to use, and you can generate a pitch-perfect invoice with it in no time. That’s not all—we can also create other customized legal papers for you, such as W-2 forms or pay stubs.
Contact us for more information, and we’ll answer back as soon as possible!
- A construction invoice is a legal document that lists the services your company has provided to the client and breaks down contractor payments.
- This type of invoice includes company and contractor information, pricing and payment details, a breakdown of work performed, and taxes.
- The easiest way to make a construction invoice is to use an invoice template generator.
- Using an invoice template generator gives your documents a professional look, leaves no opportunities for mistakes, and makes invoice tracking easy.
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