Purpose of an invoice for software development
You'll need a software development invoice to bill your clients for your completed work. Without a proper invoice, most businesses will not pay suppliers, including developers.
Here are some reasons why you might want to use a proper software development invoice template:
- You and your client will need an invoice for tax and accounting records
- Your client will use your invoice to cross-reference the work you have completed. So, you must itemize everything correctly to avoid payment delays and disputes
- Your client's accounts department requires an official invoice to add you as a supplier on their accounting system and as a beneficiary on their bank account
- For a big project with multiple payments, invoicing allows you to keep track of billing to avoid errors and disputes
Note: As a software developer, you need the freedom to focus on your craft. Sign up to Bonsai and use our free invoice template.
Software invoice format
Below is a sample invoice format for software services. There are a few mandatory requirements for every standard invoice, but your client might require customized billing when working with a software developer–we highlight these below.
Unique Invoice Number
You must use a unique invoice number for all of your professional invoices. Most people start invoicing from 0001 and increment for every new invoice. You can also add an INV prefix before the invoice to distinguish between invoices, quotations (QUO), and bills–this is especially helpful for tracking and accounting.
Pro tip: We recommend using a spreadsheet to keep track of your invoices and payments. Use these five columns:
- Invoice number
- Client name
- Contact details
- Invoice date
- Due date
Once a client has paid an invoice, you can highlight the row so it's easy to see what's still outstanding.
Business information
Business name and information are mandatory for any software invoice template. If you don't have a business, you add your personal details instead. Here are all the details you'll need for this section of the invoice:
- Business name
- Business number
- Tax or VAT number (if applicable)
- Full address (physical or postal)
- Email address
- Contact number
- Website (if applicable)
Clients invoice information
You'll also need to include your client's business details, with the same fields mentioned above.
Important: Make sure you create a clear distinction between your details and those of your client. Our free invoice template for software developers uses "From" for your details and "To" indicating who you are billing.
Your client might also require that you include a purchase order (PO) number for their accounts department. Make sure you check this with your client, as some companies will not pay invoices without a PO number.
Invoice dates
You must include the date you're issuing the invoice, and the date payment is due. If the invoice is due on the same date it's issued, put COD under the due date.
Line items and the total amount
The line item section is where you list your development services and their costs. Here is a breakdown of each column:
- Item name: The products and services you're billing. For example, front-end development, mobile app development, bug-fixing, complex frameworks, etc
- Units/quantity/hours: The quantity or number of hours per line item. Most developers charge by the hour, so this would be the number of hours you're billing
- Rate: The rate for a single unit or hour
- Total: The (units x rate) to give you a line total
Below your line items, you calculate the subtotal before tax and discounts. Then add taxes and subtract any discounts before you calculate the invoice total. If you don't have taxes and discounts, you can leave these fields empty.
Payment terms and method
Payment terms and method usually sits in the footer of a software development invoice template. Here you put your payment method and any terms related to invoicing.
Some examples of payment terms and method include:
- Your agreed payment method–bank details/PayPal address/etc
- Which party is responsible for fees (if applicable)
- Penalties for late payment
- Payment breakdown–if the customer needs to pay a deposit and the balance on completion
Other invoice fields
Here are some other fields you might want to add to your software development invoice templates. These will depend on the type of work you're invoicing and the agreements you have with clients.
- Notes: Some invoices use the notes section for additional terms, quotation numbers, PO numbers, project details, and other relevant information you want on record between you and your client.
- Logo: Including a logo can make your invoices look more professional.
Software invoice template tips
Here are three tips to help you create a crystal clear invoice for your software development services and avoid any mishaps.
- It's critical to negotiate payment dates and terms and put them in a signed software development agreement between you and your client before starting work.
- Some companies can take 30 days or more to go through the internal checks and balances before loading you on their system and making the initial payment. Check this with your client beforehand, and ask if you can submit your details early, so you don't have to wait too long for your first payment.
- Check with your client if you need to CC anyone (like the accounts department) when you submit an invoice.
- Get into the habit of sending a quotation and ask your client to agree to the rate and terms before you start working. This allows your client to voice any concerns before starting the job and avoid disputes when it comes time to pay
- Find out from your local revenue office about taxes. You might have to include taxes on your software development invoice.
- Give your multiple payment options to make it easy to use their preferred method.
- To prevent payment delays, consider adding a late penalty fee. You can charge a fixed amount or percentage of the total invoice for each day over the due date.
Creating a free software development invoice template is simple with Bonsai
Most freelance software developers work by the hour, which means you don't want to waste time creating professional invoices and writing out legal terms.
Bonsai makes invoicing easy with a customizable free invoice template ready to go! Plus, you can get your clients to electronically sign your professional invoices, making it a legally binding agreement! Let Bonsai take care of invoicing while you focus on building your software development business.
Bonsai also lets you create and send proposals, a statement of work, and contracts for software development, so all your digital paperwork is in one place–great for preparing for year-end taxes!
Software development invoice FAQs
Do I need to use a software development invoice to get paid?
Most companies require an invoice before making payments. There are rare occasions where you don't need to send an invoice for software development work, which is usually up to your client. Depending on your state/province or country, it might be a legal tax requirement to keep invoice records, regardless of whether your client wants one or not.
When should I send a software development invoice?
When to send an invoice will depend on the agreement and payment terms you have with your client. Under most circumstances, you send an invoice when the software development work is complete. For long-term contracts, you might invoice your client at the end of every month.
To use the software development invoice template featured at the top of this page, just click the button below.
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