Contractor Invoice. What’s It For and How to Make It

Regardless of what kind of contractor you are and how much your service is, it is a requisite to provide your client with closing documents. EasyStaff presents our new article on a very important element of it, i.e. a contractor invoice.

A contractor invoice, or a freelancer invoice, or an independent contractor invoice, is a document that contains an itemized statement of services provided. The invoice can be issued right at the end of the service or per additional work item.

The process of asking a client to pay you after your service is rendered is called invoicing. And it is what takes place before the actual payment. Companies, i.e. your clients, simply can’t send money your way unless they are given an invoice.

Freelance Invoice Parts: What to Write in a Contractor Invoice?

Overall, any invoice must be a clearly structured document with a headline at the beginning. An invoice must have its unique number that marks both the invoice and the client it is for. Normally, it can be an abbreviation containing a client’s name and the invoice’s number. For example, an invoice to Client John is named CJ001, and the number increases with the amount of invoices. Now, here are parts of an invoice you need to have in the document.

Contact Information for Clients and Freelancers

  • You want to write this data accurately, so there are no mistakes for either party.
  • If any information changes, make sure to reflect new records in the next invoices.

Dates and Details of Services

  • It is very important to keep the list full and accurate.
  • If there are some services or products rendered/created outside of the list, additional invoices can be issued.
  • The date of your invoice is a small but crucial thing. This is what helps you track whether it is paid on time or not.

Total Payment for Services

  • While some costs appear on the side of the list corresponding to a service position, the total amount is listed below in the final row.
  • It is smart to keep it visible, as the grand total is the only thing clients really want to see.
  • If relevant, applicable taxes also belong in this section.

Terms of Payment and Penalties For Missed Payments

  • In this section, you should mention payment methods that work for you. If there is a selection of methods that you accept, then mention the full array.
  • Payment deadlines should be mentioned here as well. You should also account for cases where payment is delayed. This is the appropriate place to list sanctions that clients may encounter if they don’t pay on time.

Tips To Manage Your Freelance Invoices Effectively

Personalized invoices. Like we said above, it is important to write your client’s name in an invoice. However, this tip goes beyond writing your name in the paper. You can add graphical designs that will make your invoice stand out from the rest. Alternatively, you could add some personalized notes that show the client you remember them as a person. Think about something along the lines of ‘Good luck with the project!' or ‘Have a great Christamas!'.

Keeping Everything In Order for Tax. Issuing and keeping track of invoices is very important not only for daily finance management but also for the time when you are supposed to pay your taxes. Clearly, invoices are your financial records. They prove that you are a self employed contractor and you receive income. You can be liable for healthcare, social security and income tax if you monitor your business expenses, income and tax deductions.

Follow Around Overdue Invoices. It is totally fine to speak up when a payment is overdue. Some wait for some time hoping for their client to see the delay. Yet it is better to let people know you are waiting for a payment. A short nudge note sent on day one of delay is a perfectly legal way to let the client know you are waiting.

Send Your Invoices Right Away. If you send an invoice right after you are done with a task, you show the client how important it is for you to receive payment on time. In other words, you value and manage your time. If you are paid on time, you are also able to sustain your business’s cash flow.

Contractor Invoice FAQ

Since an invoice is such an important document, freelancers often worry that their invoices include too much or too little information or that they are writing their price not where it is supposed to be written… There are just so many questions! So we have looked around and developed this FAQ list on contractor invoices.

Why do companies worry about invoices?
For any company, it is vital to stay compliant. Its financial operations, i.e. spendings and revenue, must be accounted for. To be transparent for tax organizations, especially if they pay overseas, they need legal closing documents to prove the transaction is legal. That’s why companies work with contractors who are able to provide invoices and closing documents.

How detailed should my description of services be?
Well, paradoxically, it needs to be both brief and detailed. It is necessary to mention specifics of jobs where possible, not only general terms. Yet the description should be comprehensible to customers, so they quickly understand what the invoice is for.
If your services require materials, then the invoice is an appropriate place to provide a detailed description of what and in what amounts has been purchased for the task. ID numbers of materials used are details worth mentioning. Your hourly wage should be noted here as well. If it is appropriate, you could add some photos or proofs to show what has been done, like a ‘before/after' photo set.

Where to put the total cost in the invoice?
It is the bottom line of the invoice that draws your customer’s attention the most. And it is exactly where your service cost should be written. Just a quick tip here. When writing how much the overall project is, don’t provide round numbers. You can opt for something like: Job 1 = $ 130; Job 2 = $ 75, etc. So the total looks like an accurately calculated result, rather than an out-of-nowhere number.

Can I customize my invoice?
Standing out to clients and remaining memorable for them is a goal of any contractor. One way to do it is to promote how unique you are in your invoices. Developing a design, using a well-structured template is very helpful in this regard. Adding a human touch to an otherwise strictly formal document is a good idea.

Can I use an online contractor invoice generator?
Yes, making the process automated is a smart way of making your cash flow more streamlined and seamless. There are many solutions for online invoice generation, with some allowing personalization as well. Consider adding your logo, for example.

Can I use a contractor invoice template that I found online?
Yes, templates are fine. However, before you fill it out, make sure there are sections for all you need to write. If the box for ‘Services Rendered' is not large enough, don’t be shy and make it bigger.

Can I create my own sample invoice and customize it?
Yes, you can use a Google Sheet or a Word template to create your sample invoice. Then, you can just keep editing it for new clients.

Final Tips for Successful Invoice Management

  • Double-check the invoice details: yours and your client’s, as well as job description and costs. Proofread invoices to avoid errors.
  • Provide payment terms to avoid confusion and to keep your client responsible for timely money transfers to you.
  • Use a consistent logical/numbering system for your invoices so keeping track of them is easy.
  • Attach any supporting documents that help clients understand how much has been done and how the price is formed.

EsayStaff and Contractor Invoice to Foreign Clients

Invoicing is an integral part of any self-employed business management. Correct and timely invoicing keeps cash flows stable and predictable. Primarily, the structure of an invoice must stand up to a single criterion, i.e. clarity. Keeping an invoice clear and transparent is what matters most.

However, issuing an invoice doesn’t guarantee that payment will happen. Indeed, sending money abroad is not a fast and easy task, as it is in a local client-contractor relationship. To stay compliant and reachable for any client, a self-employed freelancer needs to use a service or a platform that is easy to use for their clients, however big they may be. And this is where EasyStaff steps in!

EasyStaff is a global freelance management platform. Its core features are task management for remote teams, tax invoicing and cross-border payments. Unlike payments services, like PayPal or Wise, EasyStaff issues closing documents both ways (to clients and contractors) that allow both parties legalize their spending and income respectively.

With EasyStaff, companies can hire and pay any talent anywhere in the world. For them, EasyStaff is a B2B partner managed through a single B2B contract. For freelancers, the platform is the client who uses their services. To send money, companies top up their balance in their EasyStaff accounts and assign sums to contractors. In turn, independent contractors or freelancers can receive money to their cards, bank accounts or crypto wallets. EasyStaff charges a commission, and it starts at 4% per payment or 39 euro per payment, depending on a client’s choice.

However, not all companies use EasyStaff. If you are a remote contractor for a company, the odds are they won’t be too keen on creating a whole new account just to pay a single person. This is why there is a freelancer-oriented alternative — EasyStart. Basically, EasyStart is a tool to issue fully compliant invoices and receive payments from any client anywhere in the world. It helps to invoice in USD or EUR, withdraw money from freelance platforms, and receive payment to a card and a bank account. For EasyStart, commissions start at 6% per payment.

The major advantage of EasyStaff and EasyStart is that they operate globally, so any remote team can be built to accelerate business growth. Last but not least, all the documents and, naturally, transactions are fully compliant with local tax laws and regulations. Wherever you are and wherever you are paying to or getting paid from, EasyStaff manages all things compliance. So companies and contractors enjoy 100% risk-free operations worldwide and focus on what truly matters.

Ready to grow your business and boost team success? Join EasyStaff today. Get a free demo to start faster. Enjoy easy payments with EasyStaff.

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