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9 Min. Read

How to Invoice as a Contractor: Simple Guide to Invoicing with Mistakes to Avoid

Invoicing is an important skill for independent contractors to master, since you’re constantly juggling different projects that may have different billing terms and timelines. To send accurate invoices, contractors should carefully track their time and create detailed invoices as soon as they complete a project for a client. Proper invoicing is a key part of financial accounting for small businesses.

For the best in business invoicing software, try FreshBooks today. With a gallery of free invoice templates and excellent customer support service, you can rest easy knowing that your invoicing is in good hands.

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Learn how to invoices as a contractor and discover common invoicing mistakes to avoid:

How to Invoice as a Contractor

Contractor Invoicing Mistakes to Avoid

Contractor Invoice Template

How to Invoice as a Contractor

If you want to access professional, easy-to-use invoice templates in a range of different formats, visit FreshBooks to check out your options.

But first, it’s a good idea to find out what exactly goes into invoicing when you’re a contractor.

Contractors should create detailed invoices that outline important billing information, including deadlines for payment, an itemized list of the services provided and the total balance owing.

At FreshBooks, we’re committed to providing the best in invoicing software and support.

That’s why we’ve created some essential invoicing guidelines so that you can learn to submit an invoice like a pro.

Here’s a guide on how to invoice as a contractor:

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1. Identify the Document as an Invoice

This might seem obvious, but it’s important that you clearly label the document as an invoice in the header, so it’s immediately clear to your clients what they’re looking at. Include the word “Invoice” in a large, bold font.

When you use an invoice generator, this stage will be automatically taken care of for you, so you don’t need to worry.

2. Include Your Business Information

Also in your header, you’ll need to list your business’s contact information. If you have a logo, include it here. Add your name, address, email address and phone number.

It might seem self-evident, but including your business name is an important step that identifies the invoice for your client. A company name is your most important branding step and makes sure that your clients know who to pay.

Not only this, but adding any further business information such as a company logo lets your invoice stand out and leaves a professional impression on your client.

Rounding it out with your contact info lets your clients know that you’re happy to be reached if there are any discrepancies or issues that need to be followed up.

3. Add the Client’s Contact Details

Below the header, add your client’s contact information. Make sure you ask each of your clients who the correct billing contact is for your invoices. Often in the case of larger companies, there will be a dedicated billing department and your point of contact for invoicing will be different than your daily business contact.

Verifying that you have the most accurate client information shows your clients that you are detail-oriented and willing to put in the hard work. It also ensures that there won’t be any hold-ups due to incorrectly addressing your invoice to the wrong person.

4. Assign a Unique Invoice Number

Every invoice you send should have a unique invoice number assigned to it. This will help with record keeping, both for you and for your clients. It also makes it easier to refer to a specific invoice if an issue ever arises with payment. The easiest system of assigning numbers involves numbering your invoices sequentially, starting with Invoice #001, then Invoice #002 and continuing in order from there.

5. Add the Invoice Date

Include the date that you’re sending the invoice in the top section of the document.

6. Provide Details of Your Services

Next, create a table with four columns. This will hold an itemized list of your services. The first column should include a brief description of the services you provided, the next column should include the quantity or number of hours worked, the third column will list your rate of pay and the final column should include the subtotal for each service.

7. Include Your Payment Terms

Add your payment terms to your invoice, including the payment methods you accept. You should also outline the details of your late fee policy, if you have one.

Remember to include your payment information so your clients know where to transfer or send the money to.

If you prefer payment via Paypal or Google Pay, you can state your preference in this section.

If you only accept credit or debit cards, make sure to clearly outline this in your payment options.

You might even have a payment link for an easier payment process — whatever the payment methods you prefer, remember to clearly mark them so that there are no hold ups.

8. List the Total Amount Due

In the bottom section of your invoice, list the total amount owing for the bill, including applicable tax. Make sure this section stands out on the document, either by using a large font, bold lettering or a different font color.

9. State the Payment Deadline

Write the deadline for payment in a bold, easy-to-read font. Be as specific as you can be with the payment due date. Write out the full date, as in: “Payment Due November 30, 2018” rather than more vague payment terms, such as “Payment Due in 30 Days,” which can lead to confusion and delayed payments.

Some payment systems take more time than others, such as cheques. So remember to be thorough in your payment options section so that it doesn’t affect the deadline.

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Contractor Invoicing Mistakes to Avoid

Contractors can get paid faster for their services by avoiding these common invoicing pitfalls:

1. Forgetting to Track Your Hours

It’s important to establish a system for tracking your hours as soon as you begin working as a contractor, since you’ll likely charge most of your clients by the hour. You can track your hours manually, by writing down the start and end time each time you work on a specific project, along with a brief description of the work completed. Or, if you use a cloud-based accounting solution, you can easily track your time directly in the software, to streamline your time tracking system.

2. Failing to Send Invoices Immediately

The quicker you send out your invoices to clients, the quicker you should receive payment. As soon as you complete a contract with a client, create an invoice and send it along with the final work. The project will then be top of mind for the client, which can help remind them to process the payment right away. Sending the invoice immediately also means the project is fresh in your mind, so you’ll be less likely to overlook an aspect of the work and forget to bill for it.

Some people forget to submit invoices in a timely manner, which not only can affect the speed at which you get paid, but leaves the client with the impression that it doesn’t matter much if you get paid on time.

3. Not Formatting Invoices Consistently

As a contractor, you’re constantly working on different projects with various tasks and services. That can lead you to fill out invoices differently from job to job, which wastes your time and also looks less professional in the eyes of your clients. Develop an invoicing template that works for your needs and always use it as the starting point when creating new invoices. It will save you time and deliver consistent branding each time you invoice clients.

FreshBooks provides a range of blank invoice templates that are attractively formatted in a professional, easy to use setting. They’re incredibly easy to customize, and if you’re after more tailored invoicing templates you can choose from a range of industry formats.

If you’re a contractor who wants to get paid quickly and accurately for the services that you have provided, download the free contractor invoice format with FreshBooks to get started.

4. Neglecting to Add Payment Terms

Make sure every invoice you send outlines your payment terms. If a client isn’t aware of your payment terms and tries to pay their bill with a payment method you don’t accept, it can lead to frustration for your client and a delayed payment on your end. It’s also a smart practice to discuss your payment terms with a new client before signing a contract, so they understand your policies up front.

Contract terms should be established before committing to a project, so that you both start off on the right foot.

Knowing where you stand is an important foundation for a smooth-running project, and the key to getting paid well for your services.

5. Not Following Up on Late Payment

Sometimes contractors fail to follow up with a client when a bill is past its due date, to avoid an awkward conversation or to keep from seeming rude. To ensure you get paid for your work, you should follow up as soon as a payment is past due. Just send a polite, brief note reminding the client that the payment is overdue and let them know how they can pay the bill. Be diligent but pleasant in following up until you get paid.

Contractor Invoice Template

If you want to save time and use an existing invoice design rather than creating one from scratch, there are many invoicing templates you can download online. FreshBooks offers a free contractor invoice template that’s tailored to the specific need of contract workers, so you can edit the document to suit your needs and start invoicing clients right away.

Now that you know how to invoice like a pro, check out the contractor invoice examples at FreshBooks. The free contractor invoice templates are a breeze to customize and will be sure to leave a lasting impression of professionalism on your clients.

The template is available to download in Word, Excel and PDF format. No matter your software preference, you can edit the way that you prefer. Most users prefer a Microsoft Word format, for easier editing. You can always save your initial template as a Word Doc in case you want to edit your invoice or add more details in later, but when you send it off to your clients it’s best to send it as a PDF so that they can’t do any edits on their end.

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