Contractor invoice templates

True for all contracting work, your individual terms should be included on your invoice in addition to your general rates. An invoice template for an independent contractor who provides multiple services might include a breakdown of their charging process. For example, they may charge a specific hourly rate as well as a separate charge for materials needed to complete the service. As a general rule, you'll want to be as clear and detailed as possible when preparing your invoice.

A standard contractor invoice format should include space for:

1. Your name or the name of your company
2. Your client’s name
3. Invoice number and/or work order number
4. The date or duration you’re providing your services
5. For labor costs, a description of your services rendered
6. For flat rate: Dollar amount for cost of labor
7. For hourly rate: Number of hours spent performing work and dollar amount per hour for cost of labor
8. Total amount for cost of labor
9. For cost of materials, a description of each material used
10. Quantity of materials: Cost per unit of materials
11. Total amount for cost of materials
12. Miscellaneous charges: a description, quantity and cost for these items (if applicable)
13. The total price you’re charging, including applicable tax
    
    

As an independent contractor, your taxes are not automatically deducted by your employer to comply with federal, state and city tax requirements. It’s important to remember that at the end of each year when you fill out a 1099 form, you'll be responsible for paying those taxes to the IRS. By making sure to include a line item for any applicable taxes, you guard yourself against withholding too little from your income and being unable to pay your federal, state and city taxes.

Remember to set aside at least 30% of your income to pay your taxes. Rates may vary according to state (and sometimes) cities, but you'll thank yourself later when you’re able to easily cut a check to the IRS to pay your taxes instead of dipping into your hard-earned profits and savings to do so. Additionally, consider making quarterly payments to the IRS to avoid having to pay your taxes all at once when tax season rolls around.

The ideal time to send an invoice varies by industry as well as preference. Invoicing at the beginning of the client engagement ensures you won’t be working for free, though it may be objectionable to a certain clientele. Sending an invoice after the work is completed shows trust on your end, but leaves you open to unsavory clients taking advantage of that trust.

A simple solution to the latter is choosing only to work with trustworthy clients. Go with your gut—your initial correspondence should provide you with sufficient insight into your client’s character.

Still, it is far from unreasonable to start the invoicing process at the beginning of the engagement. Since contractors often don’t have a larger company standing behind them, it can be customary to request partial or even full payment before your services are rendered.

As you develop experience and foster relationships with repeat clients, your invoicing process may evolve into a more relaxed but streamlined process.

Contractors are a special breed—the ability to set your own working terms is invaluable. But your independence also leaves you especially susceptible to the hard learning curve of good business practices. These tips from business owners and individuals like you can help you avoid some common mistakes.

• Send detailed proposals – especially with contractor work, it’s important to send a detailed proposal of your services before you perform the work, spelling out exactly what you'll provide as well as how much you’ll charge for it. This provides a record of your agreed-to terms to stand in your corner if any issues arise down the line. Making sure you and your client are on the same page makes everything go smoothly.
• Accept all forms of payment – the world is changing and as a service provider you have to adapt. People want to pay in the way that’s most convenient for them. If you have limitations to the forms of payment you accept, you’re only decreasing your chances of getting paid. As a contractor, you’re in a great position to be flexible and adaptive—take advantage of that. Clearly state which terms of payment you accept on your invoice (check, credit card, PayPal, Venmo or other options) and allow your customers to choose which is easiest for them.
• Craft invoices around clients – as a contractor, you likely have to do a lot of things on your own. One benefit of that is the freedom to personalize your invoices, since you alone are preparing them. That’s a great opportunity to make your client feel properly attended to and ensure repeat business. Specificity lets the client know you're taking their needs personally. In addition to carefully itemizing your invoices for your client’s benefit, you can go the extra mile and leave them a personalized note on the invoice, too. For instance, let the client know your favorite part of the project, or leave them with some warm words that let them know you don’t just see them as a customer, but as a person. For instance, if you’re a graphic designer, you may leave them a note on your invoice that says, “I really enjoyed creating this business card for you, Mary. Can’t wait to hear about your upcoming trade show!”