The Basics of Contractor Invoice: How to Get Paid Faster
Updated: Jun 28, 2022
Cash flow is so important to contractor success that construction companies cannot afford to sleep on invoicing. In order to keep healthy cash flow, contractors need timely billing going out with invoices that communicate clearly what’s due and when - to minimize disputes and get faster payments.
What Makes a Contractor Invoice?
The most prone to disputes that often arise in construction companies in the payment process between the contractor and the client. Therefore, invoicing is an essential skill for contractors, especially independent contractors, for them to limit disputes with customers and facilitate the payment process faster. Not only that, contractors will always have different projects, which means the terms and timing of billing are also different, so it is very important for contractors to understand the elements of an invoice to easily track time and set up invoices in the most detailed and accurate way. Besides, proper invoicing will play an important role in the accounting of small construction businesses.
To request payment from customers, you need an official construction invoice. It will include the terms of payment, due date as well as information about the company and the customer.
A construction invoice should include these points:
The information of a construction company (company name, contact information)
The customer's name and contact information
Invoice date (the date of the invoice and the due date for the amount)
Brief description of the goods or services
The quantities (such as units, hours) and prices for goods or services
The payment terms
Construction Invoice Example
Preview a sample construction invoice below if you’re not sure how to get started making your own professional invoices. Then you can customize the template and make it your own.
What Are Construction Invoice Payment Terms?
Construction invoice payment terms typically pinpoint how long the customer has until cash is due. They may also offer discounts to incentivize earlier payment.
Contractors express some of the most common payment terms in a “Net D” format which is shorthand showing the number of days a customer has until payments are due. For example, “Net 30” indicates that the full amount (minus any retainage) is due 30 days from the invoice date. Contractors also show the available discount by adding just a number. For example, an invoice with “2.5/10 Net 30” offers 2.5% off the total if paid within 10 days.