How to write a contractor invoice

What goes on a contractor invoice

Six things, in the order they belong on the page. The invoice generator opens a general contractor document with the lines already in place, so most of this is checking rather than typing.

1. Bill against the stage, not the calendar. Name the stage completed. A monthly invoice with no stage attached is a request rather than a claim.
2. List change orders separately. Changes to the priced scope go on as their own lines with their own references, never absorbed into the original figure.
3. Show labor and materials apart. Days at a rate, materials at cost or at your stated margin.
4. Show retainage if it applies. The percentage held and the amount, on the document, so nobody is surprised by a short payment.
5. Reference the contract and site. Contract number, site address, and the period covered.
6. Name subcontracted work. Where you are passing on a trade, say so, so the client can see what they are approving.

The lines a contractor invoice usually carries

The generator opens with these lines when you pick General contractor. The figures are placeholders to type over, not a going rate.

Add, rename, reorder or delete any line, and set tax per line where it applies. Priced as they open, that comes to $3,430 before tax.

How to write a contractor invoice, step by step

1. Check which stage is complete. Walk the site against the schedule of values or the payment stages in the contract. The invoice claims a stage, so it goes out when the stage is done, not at month end.
2. Reference the contract and the site. Open the general contractor invoice and put the contract or job number and the site address at the top. On a build with several contractors that is how the payer finds your paperwork.
3. Enter labor and materials apart. Days on site from the diary, materials from the supplier receipts. Keeping them apart means a price rise is a materials conversation, not an argument about your day rate.
4. Add change orders one by one. Every change the client asked for gets its own line with the date it was instructed. Folded into the main figure, change orders are the money that never arrives.
5. Show retainage, then send. If the contract holds back retainage, show the gross, the amount retained and the net due. Set 30 days and note when the retainage falls due for release.

Contractor invoice example, filled in

Stage 2 of a small commercial fit-out, claimed when the stage was complete. The contract number and site sit at the top, labor is shown in days from the site diary, and materials are one line backed by receipts.

Subtotal $3,430, tax $343, total $3,773. Five days at $320 and $1,200 of materials are separate so a query on one does not hold up the other. On a contract with retainage, add a minus line for the amount held and show the net figure as the total due.

Progress billing, and claiming for a stage rather than a month

A contractor who invoices monthly for "work done" gets paid at the client convenience. A contractor who invoices against completed stages gets paid against something the client can verify.

Set the stages at the point of quoting: enabling works, rough-in, trim-out, completion. Then each invoice references a stage, and approving it is a matter of checking whether the stage is done rather than judging how much work felt like it happened.

The cost estimator is for building the job into those costed stages before the quote goes out, so the invoice lines are the same lines the client already agreed to.

Change orders, which is where the money actually goes

Almost no contract finishes as priced. The client changes something, a wall comes down and reveals a problem, a specification moves. Change orders are normal, and unrecorded change orders are how a profitable job ends up flat.

Every change order gets its own reference, its own price and its own line, agreed before the work happens wherever that is possible. On the invoice it appears as a named extra rather than an increase in the original figure.

The discipline that matters is writing it down at the time. A change order described in an email three weeks later is a negotiation; a change order numbered and priced on the day is an instruction.

Retainage, and the money you have already earned

Retainage is a percentage of every payment held back until completion, and often half of that held again until the end of a warranty period. It is normal in construction and brutal for cash flow if you have not planned for it.

Show it on the invoice: the gross value, the retainage percentage, the amount held and the net payable. That way nobody treats a short payment as a dispute, and you have a running record of what is owed to you later.

Diary the release dates. Retainage is the money most often forgotten by the person owed it, and an invoice for a release is far easier to raise when you have the original figures on the earlier documents.

Hourly, fixed price or per unit: how contractors price the work

Contracting turns on how the contract sum is broken up and when each piece becomes payable. Get the stages wrong and a profitable job still starves you of cash halfway through.

Whatever the model, the invoice is a claim against a stage rather than a bill for work done, and it should read that way: the stage, the percentage complete, the change orders approved with their references, the retainage held and the balance remaining on the contract.

Working out what to charge

Contract prices depend on the scope, the access and the materials market, so a figure from a web page will be wrong for your job. The cost estimator builds a price from your own labor and materials, and the contractor invoice calculator works out a stage claim with retainage.

Getting paid once it is sent

Mobilizing costs money, so agree a first-stage payment before you start, and put the retainage release date in your diary the day you invoice, because nobody else will remember it. If the due date passes, the late fee calculator works out what your terms allow and the due date calculator sets the new date.

Five dates decide whether a contractor gets paid on time, and four of them are set before the work starts.

Mistakes that cost contractors money

• Invoicing by month rather than by stage. You get paid at the client convenience instead of against something verifiable.
• Change orders absorbed into the main figure. A common way a priced job loses its margin.
• Retainage not shown. A short payment gets treated as a dispute instead of the agreement working normally.
• No contract or site reference. On a multi-project client it will simply wait.
• Retainage release never chased. It is the money most often forgotten by the person owed it.

General contractor invoice questions

Free contractor invoice template

The free contractor invoice template opens with the lines above already priced, in any of 10 designs made for the trade, and exports a print-ready PDF with nothing saved to a server. Opening a design needs a free account.

Invoicing guides for related trades

Everything on this site, set up for contractors

The whole toolkit, with the reason each one matters to contractors rather than in general. The four marked links open with general contractor already selected.