What is a Contractor Invoice and How to Make One Effortlessly
December 13, 2022
Providing your clients with an accurate contractor invoice is an essential step if you want to be professional and also ensure you get paid on time.
Creating this key legal document can be difficult for you as a contractor, especially if you are handling several projects with different billing terms at once. But don’t worry—we’ve got your back!
We’ll tell you everything you need to know about a contractor invoice and show you how to use an online generator to create one in a few simple steps.
What is a Contractor Invoice?
A contractor invoice is a legal document that you, as an independent contractor, can use to bill your clients for the goods or services you provided them with.
Keep in mind that contractors are not employees. They are independent of a company’s payroll system and are essentially self-employed. For example, you can use a contractor invoice if you’re a freelancer, photographer, or even a writer.
The entries in a contractor invoice depend on the type of business you run, so if you work in the construction industry, logically, you’ll have a different list of supplies compared to a writer.
But which information should you specify in your contractor invoice exactly? Read on and find out!
What Does a Contractor Invoice Include?
Although everyone specifies different information in their invoices, here’s what a contractor invoice should always include:
#1. Your Business and Your Client’s Information
First things first, a contractor invoice needs to include your business details, such as your name, address, phone number, and other contact information. You should also add your company’s logo (if you have one), as this will help you market your name.
Then, add similar information about your client. Enter their name, physical and email addresses, phone number, etc. To make sure you enter everything correctly, you should reach out to your client before writing the invoice and inquire about or double-check their personal details.
After you fill out this section, check it for any spelling errors, as everything needs to be 100% correct in case the client needs to contact you later on.
#2. Date and Unique Invoice Number
Next, you need to add the date you created and handed out your contractor invoice.
Besides the date, you must also give your contractor invoice a unique number, which can help you identify the document easily later on. This is required by law in some states, and some businesses won’t even accept an invoice that’s not numbered.
The best way to number your invoices is to use a chronological numbering system. For example, if it’s your first contractor invoice, use "001" for that one, “002” for the second, etc.
You can also add the last two numbers of the year before the number so that you can organize your documents even more easily. For example, if you’re writing an invoice for 2022, your unique numbers should look something like this: “22001,” “22002,” etc.
#4. Payment Details
Now, you must specify the payment details, such as:
- Your preferred payment method. Choose whether you want to be paid in cash, via credit cards, or any other payment system such as PayPal or direct transfer.
- The date you expect to be paid. Make sure to clearly state the payment deadline and any penalties for delayed payments.
- The discounts you might be offering. If you’re offering any discounts, you should mention that in your contractor invoice, too.
- The total sum the client owes you. Lastly, specify exactly how much your client is due for the services or goods you provided.
#5. A Breakdown of Your Services, Required Materials, and Tax
The final section of your contractor invoice should include a detailed breakdown of your services, materials required for the job, and tax.
First, you should add each service that you’re billing the client for and add the rate. Next, provide a detailed list of the materials you’ve used, which the client should pay for. And finally, add the Goods and Services Tax (GST) and Harmonized Sales Tax (HST).
After you’ve entered all these details, you should add a thank-you note to maintain a healthy relationship with your client.
How to Make a Contractor Invoice
To make a contractor invoice, you can use a program such as Microsoft Word and write it yourself. However, creating this important legal document from scratch is quite difficult and time-consuming.
That’s whyyou should use accounting software that can generate a perfect contractor invoice tailored to your preferences and projects. Don’t know where to find one? Why not use our invoice generator?
Our online generator can make you a personalized contractor invoice in no time, and on top of that, it’s easy to use! All you have to do is:
- Fill in the required fields in the template
- Review your document
- Download the invoice in PDF form
Once you’re done, you’ll be able to forward your invoice to your clients via email or print it out and mail it to them.
Best Invoicing Practices for Contractors
Now that you know how to make contractor invoices the easy way, here are some things you should keep in mind when invoicing to avoid any mistakes:
#1. Remember to Track Your Hours
The chances are that, if you’re working as a contractor, you’re billing your clients at an hourly rate. That’s why you should always track the time you invest in the project as soon as you start.
You can do this manually by writing down the precise time when you started and finished working each day. If you want a simpler solution, you can use tracking software and log your time directly, which makes the entire process much easier.
#2. Format Your Invoices Consistently
As an independent contractor, you will likely be hired by clients who require different types of work. This means that you will have to fill out invoices differently depending on the job you do for each specific client.
The best way to not get lost in the paperwork when invoicing is to use a template.
Luckily, our invoice generator allows you to save a template and reuse it later for different clients. This feature can take a lot of time off your workload and allow you to focus on your work instead of dealing with paperwork.
Most importantly, with our invoice template, your branding will be consistent each time you bill your clients. On top of that, you’ll be less likely to forget any important information that goes on this key document.
#3. Keep Track of Your Invoices
Even though you aren’t obligated by law to keep invoices after sending them to the client and receiving the payment, you should still keep track of them.
Collecting your invoices can help you with your tax duties every year. Namely, you have to fill out a W-2 form every year and send it to the IRS. To complete this form, you’ll have to know precisely how much you’ve earned and how much you’re due in taxes.
Keeping track of your invoices can also save you a headache in case a client is late with the payment. If that happens, you can just pick up the invoice for the specific client and send them an overdue payment letter.
When is the Best Time to Send a Contractor Invoice?
Once you have your contractor invoice ready, you need to send it at the right moment. The best time to do so depends on the scale of the project you’re working on. Check out the table below for more details:
Small Standalone Project
Ask for the entire payment when the work is done.
Large Standalone Project
Request an upfront payment and then invoice the rest when you complete the job, or ask for a part payment once you’re halfway through the project.
Long-Term Recurring Contract
Ask for a payment each month.
At the end of the day, invoicing your clients properly as an independent contractor is a must if you want to avoid any legal issues and get paid on time. But luckily, you can create and send an invoice without difficulties if you use an online invoice generator!
You can make a contractor invoice in a few easy steps, without wasting any time writing it yourself or missing some important details. On top of that, you can reuse the template for future clients at any time!
So, check out what we have to offer and create your contractor invoice the easy way!
- A contractor invoice is a document independent contractors use for billing clients for the goods or services provided.
- Your contractor invoice should contain your and your client’s contact information, date of issuance, a unique invoice number, payment details, and a list of your services or goods.
- The easiest way to make a contractor invoice is to use an online invoice generator.
- When invoicing, you should remember to track your hours and format your invoices consistently.