Let’s start with the primary definition. A contractor is a self-employed person that can provide a product or service without being part of a company. It’s also known as a third-party contractor or the middleman.

As an independent person, you shall pay your social security – if you’re located in the US – and taxes related to your business and medical attention.

You are also in charge of your business finances, so ensure you know how to separate your “salary” from business expenses if you want to thrive as a contractor.

And lastly, but most importantly, the contractor work requires contractor invoices. This is a different type of financial document from the usual one people get when purchasing a product or service.

The contractor invoice is a billing document where an independent contractor charges a person or a business for the services provided.

This paper usually includes hourly rates, service descriptions, fees, etc. It also includes payment terms and other details about the payment that you – as the contractor – establish with the purchaser.

For example, if you start a contract on an hourly basis, and you agree with your client that they need to pay 30% in advance and then 70% after the first month, you should also address that in your invoice.

In reality, there’s not much difference between one document and the other. The regular invoice works more like a purchase order than anything else. At the same time, the second one is a contractual payment of services.

It can take time to define when to send an invoice as an independent contractor.

Should you do it after completing a job or after finishing a milestone?

It depends on the type of clients you’re dealing with and the industry you’re working in. 

For example, small businesses in the marketing industry will probably want you to finish the job before they pay you. On the contrary, in the home improvement industry, the contractor gets paid faster and in advance to start working.

It also matters whether you are an experienced worker or not. When you’re new, you are shy and have difficulties sending an invoice. You probably also have considered your hourly rate and other details about your work. In fact, part of your job as a contractor is to send bills at the correct time.

If your services provide relevant content and value to the company, then it’s your right to get paid.

Now, consider that the longer you send an invoice, the longer it will take to get paid.

Creating contractor invoices is easier than you think. You only need to know what to include and which software to draft them.

What To Include When Creating Invoices

When you send invoices, you must be sure you include the following information:

Invoice Identification

When you prepare a specific invoice, make sure you identify it with “Invoice.” This way, your customers will recognize the document and know it’s time for payments.

Unique Invoice Number

Invoicing requires you to identify your documents with an invoice number. This can be easy as a correlated digit starting from 001. If you have problems finding the correct invoice, you can locate it with the number.

Invoice Date

Customize your invoice with the date you’re writing the receipt. It’s a mandatory field to keep track of when you emitted the document and to apply penalties in case of missing payments.

Include Business Details

When you create your invoice, ensure that you add as much information about your business as possible. Include the business name, address, email, and more contact details. You can also add the company logo – or your own logo – to build more trust. 

Add Your Client’s Information 

You need to complete the client’s details along with your information as a contractor. You must include the same fields as yours. However, you’ll also have to write a billing and shipping address if applicable.

Describe Your Services

When submitting an invoice, you must describe your hard work. If not, it could be rejected. This is proof or reference about what you’ve been developing with your client.

Here you can include:

• A brief description of your work.
• The number of services or products served.
• The number of hours worked.
• Payment rate with tax included.

Include The Amount Charged For Your Work

This is one of the most important fields you have to include. If you don’t charge any money, it’s not an invoice. You should make it visible and clear to your client.

Sometimes you could add it twice – one on the top and one on the bottom – so they remember how much they owe you.

Establish Payment Terms & Due Date

Here’s the moment when you set up your payment information and the time your client has to pay the bill.

Here you must include:

• Total cost: It refers to the total amount of money you charge for your product/service.
• Payment option. Including Paypal, wire transfer, debit card, etc. You should give your client multiple ways to complete the payment. You can also clarify if you want to get the money in your own hands.
• The number of installments. If you agree with your client on a payment plan, ensure you add those details to the invoice.
• Payment time frame. You have to give your clients a few days to pay off without extending the invoice payment for too long.

With Excel available, you can use free contractor invoice templates to send payment requests to your clients.

You don’t need to come up with your own invoice template. You can use one online and save time. It doesn’t matter if you want a refrigeration invoice or if you are working as one of the carpet and flooring contractors; they will help you describe and charge for the services rendered.

You can use some of the models we have gathered below:

Now that you have access to more than one free invoice template, you can create your own invoices, add important details and send them to your clients when requesting payments.

You won’t have to worry about drafting your billing documents with Microsoft Word and Excel. You only have to fill them up and keep them customized based on your client.

Determine the price, calculate the hours you spend and send all this information in a PDF document. Your clients will thank you for being so transparent, and you’ll be more responsible for charging them.