As a business, you are most likely to have already worked with multiple freelancers at home. Local contractors are easier to pay, and every now and then you are sure to have sent an occasional PayPal transfer to pay for their services. However, contractor management gets amped up as you go global. In this guide on contractor invoices by EasyStaff you will find a concise explanation of a contractor invoice and how to issue it.
An invoice is a document that serves as proof that an independent contractor performed work and their client, a business or an individual, owes them money for their services. Handling your contractors and freelancers goes outside of regular employed staff and payroll management. Invoices come in either per task, i.e. you are asked to pay after a project is complete, or on a monthly basis, i.e. the contractor bills you on the 30th for the month.
While there are tons of free templates out there to help freelancers and contractors bill their clients properly, one can find multiple free invoice templates or even free software to generate custom invoices. It is okay to google an invoice template and download it. The next step should to be to review what is included in the template and to consider removing or adding some parts to meet the contractor’s needs. Freelancers sometimes customize invoices by adding branded elements to it.
Regardless of where exactly an independent contractor gets their invoice from, you know it is a compliant professional invoice when there are these elements to it.
Contractor Invoice Structure
Including spaces for signature or notes might also be beneficial, allowing for any final remarks or confirmation of receipt by the client. This level of detail not only assists in expediting payment but also promotes professionalism and transparency in business transactions. Depending on the template used originally, the amount and types of fields may differ. Customizing invoices is allowed as long as its purpose and professional look remain in order.
While there are tons of free templates out there to help freelancers and contractors bill their clients properly, one can find multiple free invoice templates or even free software to generate custom invoices. It is okay to google an invoice template and download it. The next step should to be to review what is included in the template and to consider removing or adding some parts to meet the contractor’s needs. Freelancers sometimes customize invoices by adding branded elements to it.
Regardless of where exactly an independent contractor gets their invoice from, you know it is a compliant professional invoice when there are these elements to it.
Contractor Invoice Structure
- Contractor & Client details. The contractor's name and contact information are the first thing a client sees as they review an invoice. The clearer the information is stated, the less the risk of error is. Information provided should match with whatever prior documents were signed over the course of a given project. For example, if there is a contract (which we strongly recommend signing for any project), make sure details of your business and the contractor match in the contract and in the invoice.
- Invoice date. This piece of information is important in invoicing. The date implies how much there is left to pay. Overall, dates and deadlines should be considered in invoicing, so if there is a delay in either issuing an invoice or paying the responsible party is held accountable.
- Invoice number. A unique identifier helps make bookkeeping easy for both the client and the contractor. The invoice number makes finding an invoice fast if there is a need to retrace payments.
- Description of services. An invoice shows what exactly the contractor is paid for. An itemized list is perfect for this purpose. Although it may seem redundant to write out a description of jobs performed in this project, a well-written service description helps pull the invoice faster through banks or any financial institution you use to manage contractors. The more details there are, the less questions banks get in regards to what the payment is for.
- Finance. This section refers to several important items in an invoice. Total sum is the amount of money the contractor expects to be paid. Cost breakdown, if applicable, is a list of costs associated with services performed. It may include any extra spending (e.g. a software subscription) that the contractor might have used over the course of your work.
Including spaces for signature or notes might also be beneficial, allowing for any final remarks or confirmation of receipt by the client. This level of detail not only assists in expediting payment but also promotes professionalism and transparency in business transactions. Depending on the template used originally, the amount and types of fields may differ. Customizing invoices is allowed as long as its purpose and professional look remain in order.
Contractor Invoice 101
What Is a Contractor Invoice? All You Needed to Know
01/10/2025
#ForBusiness | #ForFreelancers | #Instruction
What Is a Contractor Invoice? All You Needed to Know
Contractor Invoice 101
Contractor Invoice Structure
Contractor Invoice FAQ
Making Contractor Invoicing Compliant For Any Country
How often is my contractor supposed to send their invoices?
A convenient schedule is discussed at the beginning of the project. Whatever terms you come to, you should have them fixed somewhere within every party’s reach. Ideally, it is a contract. In case you feel the contract is unnecessary, at least have the schedule discussed in texts so there is a record of discussion.
What are typical payment terms for independent contractors?
Payment term is the time period during which the client is obliged to pay the freelancer. It could be either ‘upon receipt’ meaning right away or there can be a lag, such as ‘30 days’. The timeline should be discussed beforehand, so there are no surprises when the invoice arrives.
Should I request an invoice from my contractor or do they send it themselves?
As a rule, an invoice is sent by the contractor once the project is over or after a milestone is achieved.
What do I do if the invoice doesn’t reflect the original agreements?
As a result of a genuine misunderstanding or a malicious plan, freelancers may send invoices that mention conditions that have not been discussed previously. One way to manage the situation is to show proof and demand they change the current invoice. Another way is to pay on the agreed terms with proof at hand to explain that you are following the previous agreement.
A convenient schedule is discussed at the beginning of the project. Whatever terms you come to, you should have them fixed somewhere within every party’s reach. Ideally, it is a contract. In case you feel the contract is unnecessary, at least have the schedule discussed in texts so there is a record of discussion.
What are typical payment terms for independent contractors?
Payment term is the time period during which the client is obliged to pay the freelancer. It could be either ‘upon receipt’ meaning right away or there can be a lag, such as ‘30 days’. The timeline should be discussed beforehand, so there are no surprises when the invoice arrives.
Should I request an invoice from my contractor or do they send it themselves?
As a rule, an invoice is sent by the contractor once the project is over or after a milestone is achieved.
What do I do if the invoice doesn’t reflect the original agreements?
As a result of a genuine misunderstanding or a malicious plan, freelancers may send invoices that mention conditions that have not been discussed previously. One way to manage the situation is to show proof and demand they change the current invoice. Another way is to pay on the agreed terms with proof at hand to explain that you are following the previous agreement.
Contractor Invoice FAQ
One way to reduce risks in contractor management is working with EasyStaff. The software is provided by a European company based in Lithuania that acts as a B2B partner for businesses and invoices them as a B2B partner.
Unlike a self-employed contractor, EasyStaff is underpinned by a team of legal and finance professionals whose experience goes into making your contractor management safe. The structure behind EasyStaff protects clients from worker misclassification and other contractor-related risks.
For clients, EasyStaff is the B2B partner that sends invoices and closing documents upon payment. It also has the capacity of a freelance platform in the sense that it locks the payment till the project is over. In other words, clients book money for their contractors in their EasyStaff account till when the task is complete.
For self-employed contractors and freelancers, EasyStaff is the client that pays them and provides closing documents. Contractors, therefore, are able to report the income and pay tax at home, which is another advantage EasyStaff presents to companies managing contractors.
EasyStaff sees its mission in helping contractors and clients work internationally. The service is dedicated to making international remote teams a reality, where payments are compliant and secure and where businesses and freelancers can count on receiving proper closing documents on every transaction. EasyStaff equally values its corporate clients and self-employed users, so the platform is convenient for all users.
Unlike a self-employed contractor, EasyStaff is underpinned by a team of legal and finance professionals whose experience goes into making your contractor management safe. The structure behind EasyStaff protects clients from worker misclassification and other contractor-related risks.
For clients, EasyStaff is the B2B partner that sends invoices and closing documents upon payment. It also has the capacity of a freelance platform in the sense that it locks the payment till the project is over. In other words, clients book money for their contractors in their EasyStaff account till when the task is complete.
For self-employed contractors and freelancers, EasyStaff is the client that pays them and provides closing documents. Contractors, therefore, are able to report the income and pay tax at home, which is another advantage EasyStaff presents to companies managing contractors.
EasyStaff sees its mission in helping contractors and clients work internationally. The service is dedicated to making international remote teams a reality, where payments are compliant and secure and where businesses and freelancers can count on receiving proper closing documents on every transaction. EasyStaff equally values its corporate clients and self-employed users, so the platform is convenient for all users.
Making Contractor Invoicing Compliant For Any Country
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Vilnius, Labdarių g. 6A-18, LT-01120, Lithuania
