How to Create a Contractor Invoice

Creating a contractor invoice | ContractingWISE


Creating an invoice for any work you’ve done as a business is key to making sure you get paid fairly and promptly for your work. It is also a legal obligation if the transaction in question is a business to business transaction. On top of this, it will form a written and/or electronic record of exactly what goods or services you’ve provided, how much you are owed for your work and when you expect to be paid. All of this is vital if your business is going to be the success you want it to be.

When many smaller businesses are struggling with cash flow difficulties due to late or non-existent payments, a clearly written and set out invoice can make all the difference. If nothing else, it will stop any disputes further down the line regarding exactly how much you expected to be paid, when the payment was due and what method you wanted the client to use.

The Main Body of the Invoice

When creating an invoice, take the time to enquire exactly what details the client will be expecting to see. Some clients, for example, may require timesheets giving a breakdown of exactly how the work was carried out signed off by individual contractors. This is often the case when dealing with bigger businesses which process invoices through a large accounting department. An individual, on the other hand, is more likely to know the details of the work you’ve carried out. You should also make sure it’s clear whether the client in question accepts electronic invoices or needs a hard copy for their own records. In the case of email submission, a virtual paper trail will be created automatically. If a hard copy is asked for, make sure that you produce a duplicate for your own records.

The cynical view might be that this is simply a case of larger companies looking for any excuse to delay making payments to smaller businesses. The fact of the matter, however, is that all companies have their processes set in place. Creating an invoice template which you can re-use multiple times will save time when dealing with the same business in the future or with businesses of a similar size and type.

By law, there are certain things which have to be included on an invoice document. The first of these is that the word ‘Invoice’ must be clearly displayed at the top of the document. The top half of the invoice must then include:

-A unique reference number

-Your company name, address and contact information

-The company name and address of the customer you’re invoicing

-The date of the invoice

-If you’re operating as a limited company, you have to include your company’s registered number, which can be found on your certificate of incorporation

Some clients may also issue a PO number when asking for work to be done. Include this on your invoice as well, as it will make it easier for them to process.

Download our free invoice template

Services Provided

The next section of the invoice is a detailed breakdown of the services which you’ve provided. Make the description of what you’ve done as clear as possible, breaking it down into hours worked, price per hour and the details of any expenses the client has to pay. If applicable, you must also include the net amount owed minus VAT and the total amount inclusive of VAT.


The final part of any invoice, and in some sense the most vital, is the section detailing how you wish to be paid. Set out the manner of payment which you prefer, such as cheque or, electronic transfer. If it is a transfer, include your sort code and account number. Also, request that the client attaches the invoice reference number when they make the payment as this will make it much easier to trace in your own systems.

Although a 30 day payment period is generally accepted as reasonable, and is the legal period after which the government accepts that a payment is late you may wish to be paid more quickly than this. If that is the case, then include your preferred payment time on the invoice, whether that’s seven days, 14 days or upon receipt of the invoice.

Getting a consistent invoicing system in place has many benefits. It makes it more likely that your clients will pay promptly, since all of the information required will be present on every invoice. It also makes it far easier for you to maintain your own records. A clear and practical invoice design will make it possible to work back through your own records and calculate exactly what you’ve been paid and what you’re still owed. These figures will come in particularly handy when completing your annual accounts.

If you’re at all uncertain about how to create and use invoices, then access the expert help on offer from ContractingWISE. Whether you’re dealing with a single invoice or creating an invoicing system for your wider business, we’ll be able to offer advice, and make sure you don’t make expensive mistakes.

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Download Free Invoice Template

Download Invoice Template


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