You finished the job. Materials are accounted for. Labor hours are logged. Now you need to bill the client properly.
Contractor invoices have specific requirements that generic templates miss. You need to break out labor and materials separately, handle deposits and progress payments, and create documentation that satisfies both clients and tax authorities.
Here's a free contractor invoice template designed for the way contractors actually bill, plus guidance on getting it right.
Download the Free Template
Excel template with auto-calculating formulas:
The template calculates line item totals, subtotals, tax, and final amount automatically.
What Makes Contractor Invoices Different
Unlike service-only invoices, contractor invoices typically include both labor and materials. Some jobs require progress billing—invoicing at milestones rather than all at once. Clients often expect itemized breakdowns showing exactly where their money went.
Getting this right matters. Vague contractor invoices lead to disputes. Detailed ones protect both you and the client.
What to Include on a Contractor Invoice
Your Business Information
Company name, address, phone, email. Include your contractor's license number if your state requires it. This legitimizes your invoice and may be necessary for permits or insurance claims on the client's end.
Client Information
Client name or company, project address (if different from billing address), and billing address. For larger jobs, include a project name or job number for reference.
Invoice Number and Date
Unique invoice number and the date issued. For progress billing, consider numbering like INV-2024-001-A, INV-2024-001-B for the same project.
Job Description or Project Reference
A brief description of the overall project or a reference to the original estimate/contract. This ties the invoice to the agreed scope of work.
Labor Breakdown
Itemize labor by task or phase:
- Demolition and prep — 8 hours @ $65/hr — $520
- Framing — 12 hours @ $65/hr — $780
- Finish work — 6 hours @ $65/hr — $390
If you have a crew, you might show crew hours rather than individual hours. What matters is transparency.
Materials Breakdown
List materials with costs. You can include markup if that's your pricing model:
- Lumber (2x4, 2x6) — $342.50
- Drywall (12 sheets) — $156.00
- Hardware and fasteners — $89.00
Some contractors attach receipts. Others provide itemized lists. Either works—the goal is showing what was purchased and at what cost.
Subtotals by Category
Total labor and materials separately before combining. Clients appreciate seeing:
- Labor Subtotal: $1,690
- Materials Subtotal: $587.50
This breakdown helps them understand their investment.
Tax
Sales tax rules for contractors vary by state and project type. Some states tax materials but not labor. Others tax the whole job. Know your local requirements and show tax as a separate line.
Payment Terms
Standard contractor terms:
- Due on Receipt — Common for smaller jobs
- Net 30 — Standard for commercial work
- Progress payments — 30% deposit, 40% at framing, 30% at completion
Reference any deposit already paid and show the remaining balance.
Payment Methods
How can they pay? Check, bank transfer, card, Venmo—list your options. For larger amounts, bank transfer or check is typical. Include necessary details (account number, mailing address).
Progress Billing for Larger Jobs
For projects spanning weeks or months, waiting until completion to invoice creates cash flow problems for you and sticker shock for clients.
Progress billing solves this:
- Milestone-based — Invoice at defined project stages (foundation complete, rough-in complete, etc.)
- Percentage-based — Invoice a percentage of total contract at intervals
- Time-based — Invoice weekly or monthly for ongoing work
Always tie progress invoices to work completed. If you invoice for "50% complete," be ready to show what that 50% looks like.
Handling Change Orders
Scope changes happen. When they do:
- Document the change order separately before doing the work
- On the invoice, clearly label change order items
- Reference the approved change order number
This prevents disputes over "I never agreed to that" because you have documentation.
Common Contractor Invoice Mistakes
- Combining everything into one line — "Kitchen remodel — $12,000" tells clients nothing and invites questions
- Missing license number — Some clients need this for insurance or permits
- No reference to contract or estimate — Makes it hard for clients to verify what they agreed to
- Forgetting deposits — Show what was paid upfront and what's remaining
- Unclear tax treatment — Know your state's rules and apply them correctly
Template vs. Invoicing Software
The Excel template works well for straightforward jobs. But contractor businesses often have complexities:
- Multiple ongoing projects
- Progress billing across months
- Tracking deposits and balances
- Year-end reporting for taxes
Juggling this in spreadsheets gets messy fast. Invoicing software handles tracking automatically, but most charge monthly—$15-30/month adds up.
IronBase is a one-time purchase ($79) that handles multiple clients, tracks payments, and generates professional PDFs. Works offline, no subscription. Useful when spreadsheets start limiting you.
Key Takeaways
- Download the free template: English | Español
- Break out labor and materials separately—clients expect this transparency
- Include your contractor's license number if required in your state
- Use progress billing for larger jobs to maintain cash flow
- Document change orders and reference them on invoices
- Show deposits paid and remaining balance
A detailed contractor invoice protects you and builds trust. That trust turns one-time clients into repeat business and referrals.