Are you a contractor in the building trades industry or are you starting a technical services contracting business?
Your invoice can include fees for consultation, labor, and materials, although some contractors offer free consultations and estimates, then incorporate the cost in their contract pricing.
Download our free contractor invoice template to send to your clients and get paid.
Invoicing for materials
Depending on what kind of contractor work you engage in, you might need to buy supplies or parts for your customer. This cost is usually passed along to your client with a markup, which is a percentage added to the material price to take as profit.
Percentages vary based on your material sources and your market. For instance, if you’re a roofing contractor buying shingles from a wholesaler, your markup might be higher than if you buy them from a retailer.
What information should your contractor invoice contain?
The terms of your agreement with your customer or client determine what information should be detailed on your contractor invoice. Generally, you should separate your contract price (the amount you state in the contract that your client must pay for your work) from any materials costs, and goods and services tax (GST) and harmonized sales tax (HST).
Imagine you’re a roofing contractor who has completed a new roof installation on your customer’s home. Your contract requires your customer to pay 50% of the contract price and materials costs up front, and the remaining 50% plus tax when you complete the job and it passes inspection.
When it comes time collect the final balance, your invoice should show:
* The contract price for the roof installation ($5,000)
* The cost of materials ($2,000)
* A brief description of the work location and your scope of work
* The dates you started and finished the work
* The total cost ($7,000)
* Credit for the 50% payment amount you received ($3,500), as well as the date you received it
* The amount of GST/HST
* The balance owed ($3,500 plus GST/HST) and the due date
Your invoice should also include to whom the payment should be made, acceptable forms of payment, and the names, addresses, and contact information of the invoice sender and recipient.
When should you send contractor invoices?
Some contractors invoice their clients at the end of the month because it reduces time spent preparing paperwork. However, small business experts recommend sending invoices immediately after completing a project. Instant invoicing helps ensure cash flow and prevents you from carrying your customer’s debt for longer than necessary under your contract terms. Software programs and mobile apps can automate your invoicing processes.