Contractor Invoice Template
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What is a contractor invoice?
A contractor invoice is a bill for construction or trade work that separates labour from materials and ties the amount claimed to a stage of the job, a change order, or a purchase order.
Contractor invoices are checked more closely than most, because the person approving them is usually reconciling the claim against a contract, a schedule of works, or a purchase order before releasing money. The invoices that get paid quickly are the ones where labour, materials and change orders are visibly separate, and where the amount claimed obviously maps to something that was agreed.
Who it’s for: General contractors, subcontractors, electricians, plumbers, HVAC technicians, landscapers, builders and other trades billing homeowners, builders or main contractors.
How contractors usually bill
- Time and materials
- Labour lines with hours and hourly rate, materials lines at cost or cost plus an agreed markup. Keep them in separate blocks — mixing them makes the invoice hard to check and slows approval.
- Progress billing (draws)
- One line per completed stage, naming the stage from the contract and the percentage complete. Enter previous draws in the Amount Paid field so the balance due reflects this claim, not the contract value.
- Fixed price
- A single contract line, invoiced on completion or split across agreed milestones. Work outside the original scope belongs on its own change-order line, never absorbed into the contract line.
- Change orders
- Invoice approved variations as separate, individually numbered lines referencing the change-order number. Unreferenced extras are the most common cause of a disputed construction invoice.
What to put on a contractor invoice
Beyond the fields every invoice needs, these are the ones that decide whether this kind of invoice gets approved quickly:
- Licence or registration number
- Many jurisdictions require a contractor licence number on invoices, and homeowners and main contractors often check it. Put it in your business details so it appears on every document.
- Job site address
- The site is frequently not the client's billing address. Use the Ship To field for the site so the invoice can be matched to the right job.
- Purchase order number
- Main contractors and commercial clients pay against a PO. An invoice without the PO number will usually be returned unpaid, whatever else is on it.
- Separate labour and materials lines
- Different approval paths and, in some places, different tax treatment. Separating them also lets a client approve part of an invoice while querying the rest, instead of holding all of it.
- Retainage or retention
- If your contract withholds a percentage until completion, show it as a discount line labelled "Retention" so the claimed amount and the payable amount are both visible.
Example: a progress invoice for an electrical fit-out
A subcontractor claiming a second-fix stage against a purchase order, with materials shown separately:
| Description | Qty | Rate |
|---|---|---|
| Second-fix electrical labour — Stage 3 of 4 (100% complete) | 1 | 6,400.00 |
| Consumer unit and RCBOs (materials, at cost) | 1 | 1,180.00 |
| Cable and containment (materials, at cost) | 1 | 740.00 |
| CO-14: additional socket circuits, kitchen (approved 12 Mar) | 1 | 890.00 |
The change order carries its own reference and approval date, so the client can trace it. A 5% retention would be entered as a percentage discount labelled "Retention (5%)", and earlier draws go in the Amount Paid field.
Why labour and materials belong on separate lines
Beyond making the invoice readable, the split matters commercially and sometimes legally. Materials may be taxed differently from labour in your jurisdiction, some contracts allow a defined markup on materials but not on labour, and clients frequently want to approve a materials claim against a delivery note while querying hours. An invoice that bundles everything into "Electrical works — 9,210" invites a phone call; one that itemises rarely does.
Getting change orders paid
The pattern that causes disputes is doing extra work on a verbal instruction and adding it to the next invoice without a reference. Give every variation a number, get it approved in writing before the work happens where you can, and invoice it as its own line quoting that number and the approval date. If a variation was genuinely instructed verbally, write the instruction date and who gave it into the line description — far weaker than written approval, but much better than nothing.
Progress claims and retainage
On staged work, invoice the value of the stage completed, not the contract value, and show previous payments so the balance due is the amount you actually expect. Where a contract withholds retention until practical completion, showing it explicitly on each claim keeps the running total transparent and makes the final release invoice straightforward. Payment timing on construction contracts is often governed by specific legislation — check the rules that apply where you work rather than assuming standard commercial terms.
Frequently asked questions
What should a contractor invoice include?
A contractor invoice should include your business name, contact details and licence or registration number, the client's billing details, the job site address, a unique invoice number, the issue and due dates, the purchase order or contract reference, separate labour and materials lines, any approved change orders with their references, the subtotal, tax, any retention withheld, previous payments, and the balance due.
How do I invoice for a progress payment?
Invoice the value of the stage you have completed rather than the whole contract. Name the stage and the percentage complete in the line description, enter previous draws in the Amount Paid field, and the invoice will show the balance due for this claim.
How do I show retainage on an invoice?
Enter it as a discount line labelled "Retention" or "Retainage", as a percentage or a fixed amount. This keeps the value of the work claimed and the amount actually payable both visible on the same document, which is what a project manager or quantity surveyor needs in order to approve it.
Do I need a purchase order number on the invoice?
If your client issued one, yes — commercial clients and main contractors typically match invoices to purchase orders automatically, and an invoice without the PO number is rejected before a human sees it. Enter it in the PO Number field.
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