Timesheet Invoice Template: Easy Billing for Hourly Work

Using a timesheet invoice to bill clients is common practice in labor-intensive industries, where output is directly tied to the time spent working. With these documents, freelancers, contractors, and agencies that perform hourly work ensure they are compensated adequately for every billable hour.

In this article, we’ll take a closer look at timesheet invoices to understand exactly what they are and how to create them. We’ll provide a step-by-step design guide, talk about templates, and discuss the pros and cons of this type of invoice.

Key Takeaways

• A timesheet invoice is a type of invoice that multiplies work hours by rates per hour to determine subtotals and total amounts due.
• You can create a timesheet invoice manually, using basic word processing software like Google Docs, Microsoft Word, or Excel.
• The best way to make timesheet invoices is with online invoice generators, like the one at Paystub.org.
• Most online invoice generators feature professional templates, built-in calculators, features for expense tracking and payment integration, and more.
• Some of the biggest mistakes you can make when creating timesheet invoices are forgetting to include hours, rates, or payment terms, or using complicated formatting.

What Is a Timesheet Invoice?

A timesheet invoice is a document used for billing clients that focuses on the hours worked over a specific period. It determines the total amount due by multiplying the number of hours by an hourly rate.

This metric is the main differentiator between a standard and a timesheet invoice. Standard invoices typically provide itemized lists of products sold (e.g., sales invoice) or services rendered, with each item being multiplied by a corresponding rate and no mention of work hours.

On the other hand, a timesheet invoice uses time spent as the primary metric. It will still include an itemized list, but each item will consist of the type of work performed. Every item should have an hourly rate used to calculate subtotals.

As a result, a timesheet invoice combines the functionality of a timesheet with the purpose of an invoice. It’s commonly used by freelancers and contractors in project-based professions, as well as by consultants and lawyers, among others.

What to Include in a Timesheet Invoice

A timesheet invoice—much like a standard professional invoice—must include several key elements to convey all the necessary information to the client and ensure prompt payment.

These elements are:

• Your business information. Include your business name (or personal name, if you’re making a freelancer timesheet invoice), address, phone number, and email.

• Client information. List the client’s name and contact information.

• Invoice number and date. Include a unique invoice number for filing and tracking purposes, and the date of issuance.

• Billing period. Specify the work period that your timesheet invoice covers, including the start and end dates.

• List of services. Provide an itemized list of services with columns for tasks performed, the hours spent on each task, and the hourly rate.

• Subtotal, taxes, and total amount due. Calculate the subtotal, account for taxes and any other applicable fees, and clearly mark the final amount as “Total Amount Due.”

• Payment terms. Payment terms encompass a due date, accepted payment methods, and policies for early payment discounts or late fees. For international invoices, you should also include the currency.

• Notes. An optional section for any additional notes and instructions, or even a brief thank-you to the client.

How to Create a Timesheet Invoice: Step-by-Step Guide

You can create a professional timesheet invoice with hours and rates manually, using basic software like Microsoft Word or Excel.

Here’s a simple step-by-step guide on how to make an invoice from scratch or using a template:

• Start with the header. Include the essential information about you or your business, as well as your client, at the top of the document.

• Add invoice details. Add the unique number to your invoice (e.g., #00123) and the date of issuance.

• Itemize your work. Create a simple table where every row is a specific service you provided. Include a description, hours spent, and hourly rate for each item.

• Calculate the total amount due. Sum up the costs of every item, add any applicable taxes, and determine the final amount due.

• Specify payment terms. Outline how you want to be paid.

• Add final notes. Include any final instructions or information, or write a personalized thank-you message.

Pros and Cons of Manually Creating Timesheet Invoices

Now that you know how to manually create an hourly billing invoice, let’s examine the pros and cons of this method.

Pros of Manually Creating Timesheet Invoices

Let’s start with the biggest advantages of manually creating timesheet invoices:

• Little to no cost. You can manually create timesheet invoices using various free software, like Google Docs or a free version of Microsoft Word. This makes it perfect for entry-level professionals operating on a tight budget. In a crunch, you can even create a handwritten invoice.

• Full customization. General word processing software gives you complete control over your documents. The creation process may take some time, but you can design your invoice however you like.

• Simplified low-volume invoicing. If you’re only creating several timesheet invoices per month, doing so manually won’t take a lot of time. There’s no need to learn new software and implement it into the workflow.

Cons of Manually Creating Timesheet Invoices

Now, here are the biggest drawbacks of this method:

• Requires time. Creating timesheet invoices by hand requires a lot more time than using specialized invoice generators.

• Prone to errors. Manually inputting information and performing calculations significantly increases the risk of human error. This can lead to an increase in unpaid invoices, and it can negatively affect your business reputation.

• Reduced professionalism. While it’s possible to create elegantly designed and professional timesheet invoices manually, they will typically lack the polish provided by specialized software.

• Hard to track. Many invoicing software solutions offer built-in tracking features. They track outstanding payments and send automated payment reminders and follow-up messages, all of which must be done manually otherwise.

Using an Online Invoice Generator to Create an Invoice

If you’re running a business that consistently issues a medium or high volume of invoices, you’re much better off using an online timesheet invoice generator. These tools are specifically designed to streamline invoicing processes, save time, and reduce the chances of errors.

At Paystub.org, we designed a user-friendly invoice generator perfect for freelancers and small businesses.

Here’s a brief step-by-step guide on how to use it:

• Select an invoice generator from our website (we also offer a pay stubs generator, a Form 1099 generator, and a Form W-2 generator).

• Choose a template based on your needs.

• Fill out the form by inputting information in predesignated spots. Leverage built-in features to automatically calculate subtotals, taxes, discounts, and final amounts.

• Review your final invoice to see if anything needs changing.

• Check out to download a finished document.

Features of Online Generators

Here are some of the best features of professional invoice generators:

• Customizable templates. Invoice templates that most generators offer allow for plenty of customization. Some of the aspects that you can adjust include layouts, colors, fonts, and overall organization. You can also add your logo, signature, etc.

• Automated calculations. Online invoice generators instantly calculate subtotals based on your hours and rates. They can also account for taxes, fees, and discounts, making all calculations effortless and accurate.

• Integrated time tracking. Many generators have built-in tools to help you track contractor billing hours. Then, they automatically add hours to your invoices.

• Expense tracking. Some online solutions allow you to track and add expenses to your invoice to ensure that you’re adequately reimbursed and compensated.

• Payment integration. Platforms like PayPal allow you to accept payments directly through the invoice. This significantly simplifies the process for the client and helps you get paid faster.

Benefits of Online Generators

Now, let’s take a look at all the biggest benefits you gain with feature-packed online invoice generators:

• Increased operational efficiency. By using automated systems and invoice software, you’ll reduce the time and resources needed to make these documents. This allows you to focus on running your business without spending much on menial administrative work.

• Enhanced professionalism. Clean and well-organized timesheet invoices designed by specialized tools convey a sense of professionalism and authority.

• Improved accuracy. Built-in calculators and tax features significantly reduce the risk of making a mistake due to manual data entry.

• Better invoice management. Online generators enable automatic invoice numbering, storing, retrieval, and tracking. This makes record-keeping much more straightforward and improves your overall financial planning.

Are Timesheet Invoices Still Used?

While the method of manually tracking billable hours and adding them to an invoice is outdated, the concept of timesheet invoices and hours-based billing is still highly relevant.

The process of tracking time, creating an invoice, and delivering it to the client has been modernized. Most modern invoicing platforms have all the necessary features integrated, allowing for automated time tracking, billing, invoice management, and payment processing.

As a result, the practice of manually making timesheet invoices and keeping spreadsheets of hours and services has been replaced by simple invoices made using specialized platforms.

4 Typical Mistakes to Avoid When Making Timesheet Invoices

Before we wrap up, let’s see what are some of the biggest and most common mistakes you can make when making time tracking invoices.

#1. Forgetting to Include Dates/Hours

The main purpose of a timesheet invoice is to specify the timeframes under which the work was completed. Not including the start and end dates and the hours you spent on each task can lead to confusion and disputes.

You should always make sure that every item in your timesheet invoice has a precise number of hours next to it. Otherwise, clients may question the subtotal and total amount due.

#2. Not Specifying Hourly Rates

Specifying hourly rates is just as important as including the number of hours. These are the two essential metrics used to calculate the costs of your work.

Not adding the rates will make the details in your timesheet invoice vague and may lead to discrepancies. A detailed invoice with exact rates specified for each item leaves no room for misinterpretation and shows clients precisely what they are paying for.

#3. Missing Payment Terms

Having hours, rates, and total amount due on a timesheet invoice is not enough if you forget to include payment terms. This is another vital piece of information that the client needs in order to pay you.

That’s why your invoice needs to have a clear due date or a net term, your accepted payment methods, and any late payment fees or discounts for early payments.

#4. Overly Complicated or Unclear Formatting

An invoice should be clear and organized with a business document format that is easy to read. Any additional complexities, such as obsolete graphics, multiple fonts, unnecessary colors, and irrelevant information, negatively affect the invoice’s legibility.

If you’re making these documents manually, look up a few timesheet invoice examples to get a good idea of the layout, and always strive for simplicity over complexity.

Final Thoughts

A timesheet invoice is a critical financial tool for professionals who bill clients based on how much time they spend working. Simple but detailed invoices give clients insight into the hours, rates, expenses, and taxes. These details provide justification for the final price and ensure prompt payment.

Don’t forget to leverage online invoice generators to create accurate and professional documentation. While you can craft timesheet invoices manually, it’s always better to use a tailor-made tool, like the one at Paystub.org, and to spend your time and effort growing your business.

Timesheet Invoice FAQ

#1. What is the difference between an invoice and a timecard?

An invoice is a professional document sent to the client as a formal request for payment for products sold or services rendered. On the other hand, a timecard (also referred to as a timesheet) is a document used to track the hours an employee or contractor has worked.

#2. How to make an invoice for hours worked?

The simplest way to make an invoice for hours worked is to use a dedicated invoice generator or a timesheet invoice template. Include all the necessary information, and then create an itemized list of services rendered, the hours spent on each service, and hourly rates. Finally, calculate the subtotal and total.

#3. How do I account for taxes on a timesheet invoice?

To account for taxes on a timesheet invoice, first calculate the cost of your services and determine the subtotal. Then, determine the applicable tax rate and the corresponding amount, and include them as separate items. Finally, sum up everything to get the total amount due.