Construction billing is complex. You're tracking labor across multiple workers and trades, materials from various suppliers, equipment rentals, permits, and often progress payments tied to project milestones. A generic invoice template doesn't cut it.
Here's a free construction invoice template designed for the industry, along with billing practices that keep cash flowing and clients happy.
Download the Free Template
Excel template with auto-calculating formulas:
Includes sections for labor, materials, equipment, and permits with automatic totals.
What Makes Construction Invoicing Different
Construction projects have characteristics that demand specialized invoicing:
- Multiple cost categories — Labor, materials, equipment, subcontractors, permits
- Long project timelines — Monthly or milestone billing rather than invoice-on-completion
- Retainage — A percentage held back until project completion
- Change orders — Scope changes that need documented billing
- Lien rights — Proper invoicing protects your ability to file liens if needed
Professional construction invoices create a paper trail that protects everyone involved.
What to Include on a Construction Invoice
Your Business Information
Company name, address, phone, email, and contractor's license number. The license number is often legally required and clients may need it for permits or insurance documentation.
Client and Project Information
- Client name and billing address
- Project name
- Project address (job site location)
- Contract or project number
For construction, the project address matters as much as the billing address—they're often different.
Invoice Number and Dates
- Invoice number (unique identifier)
- Invoice date
- Billing period (for progress billing: "Work performed November 1-30, 2024")
- Payment due date
Labor Breakdown
Detail labor by trade, phase, or task:
- Framing labor — 48 hrs @ $55/hr — $2,640
- Electrical rough-in — 16 hrs @ $75/hr — $1,200
- Drywall installation — 24 hrs @ $50/hr — $1,200
If billing crew time, show total crew hours or break down by worker classification if required.
Materials
Itemize materials with quantities and costs:
- Lumber (framing package) — $3,450
- Electrical supplies — $890
- Drywall (48 sheets) — $720
- Fasteners and hardware — $245
Many construction invoices attach a materials summary or supplier receipts for documentation.
Equipment
Include equipment rentals or usage charges:
- Excavator rental — 3 days @ $450/day — $1,350
- Scissor lift rental — 1 week — $675
- Small tools and consumables — $150
Subcontractors
If billing for subcontractor work:
- HVAC installation (ABC Mechanical) — $4,800
- Plumbing rough-in (Smith Plumbing) — $2,200
Note whether markup is included or if billing at cost.
Permits and Fees
Document permit costs passed through:
- Building permit — $450
- Electrical permit — $125
- Inspection fees — $200
Category Subtotals
Summarize each category:
- Labor: $5,040
- Materials: $5,305
- Equipment: $2,175
- Subcontractors: $7,000
- Permits: $775
- Subtotal: $20,295
Tax
Construction tax rules are notoriously complex. Some states tax materials only, others tax the entire contract. Some exempt certain project types. Apply taxes correctly and show them clearly—errors create liability.
Retainage (If Applicable)
Many construction contracts include retainage—typically 5-10% held back until project completion:
- Subtotal: $20,295
- Less 10% retainage: -$2,029.50
- Current amount due: $18,265.50
Track cumulative retainage and release it on your final invoice.
Progress Billing
For projects beyond a few days, progress billing is standard. Common approaches:
Schedule of Values
Break the project into line items with assigned values. Each progress invoice shows:
- Original scheduled value for each line
- Percentage completed this period
- Amount to bill this period
- Cumulative amount billed
- Balance remaining
This format (common on commercial projects) gives clear visibility into project progress.
AIA-Style Billing
Commercial and government projects often require AIA G702/G703 format invoices. If your client requires this, confirm the specific format before submitting.
Milestone Billing
Simpler projects might bill at milestones:
- 30% at contract signing
- 30% at rough-in completion
- 30% at substantial completion
- 10% at final completion
Change Order Billing
Scope changes are inevitable in construction. Handle them properly:
- Document change orders before performing the work
- Get written approval with pricing
- Bill change orders as separate line items
- Reference the change order number
Example:
- Change Order #3: Additional electrical outlets (6) — $840
Mixing change orders into base contract billing creates confusion and disputes.
Protecting Your Lien Rights
Proper invoicing supports your ability to file a mechanic's lien if needed. Key practices:
- Invoice regularly and keep copies
- Send invoices to the correct party (property owner, general contractor, or both)
- Document delivery of invoices
- Note outstanding balances clearly
Lien laws vary by state. Know your requirements.
Common Construction Invoice Mistakes
- Missing license number — Often legally required
- Lumping costs together — "Construction work — $25,000" invites questions and disputes
- Forgetting retainage — Bill it correctly or you'll confuse receivables
- No project reference — Especially problematic with the same client across multiple jobs
- Undocumented change orders — Bill separately with approval reference
- Wrong tax treatment — Construction tax errors create liability; know your state's rules
Template vs. Software
Excel templates work for simple jobs. But construction businesses deal with:
- Multiple projects running simultaneously
- Progress billing with retainage tracking
- Change order management
- Subcontractor payment tracking
- Job costing and profitability analysis
This complexity eventually outgrows spreadsheets. IronBase handles multiple clients and projects for a one-time $79 purchase—no subscription fees. Track payments, generate professional PDFs, keep everything organized. Good option when your business needs more structure.
Key Takeaways
- Download the free template: English | Español
- Include your contractor's license number—it's often required
- Break out labor, materials, equipment, subs, and permits separately
- Use progress billing for projects beyond a few days
- Track and bill retainage correctly
- Document change orders separately with approval references
- Know your state's construction tax rules
Construction invoicing takes more effort than generic billing. That effort protects your cash flow, prevents disputes, and preserves your lien rights. Worth doing right.