What is a Subcontractor Invoice?
A subcontractor invoice is a document that independent contractors use to collect payments for services provided. It usually breaks down the services, costs, and compensation policies for a project.
Sending a professional invoice on time helps you to track payments, protect your business, file taxes, and say goodbye to cash flow woes.
A comprehensive invoicing process helps you:
- Identify: outstanding debit invoices and debtors
- Gather: key information for preparing tax reports
- Track: client payments, due dates, and missed payments
- Record: important financial information
Whether you run a contracting business or are a solo subcontractor, take business invoicing into your own hands for business growth and financial stability.
What to Include in the Subcontractor Invoice
A subcontractor usually creates an hourly invoice for one-off jobs or a project-based invoice for larger projects. In the case of long-term subcontracting, a recurring invoice is normally the solution.
However you choose to charge for your services, you need to ensure you’re including all the necessary invoice sections—add these elements to ease payment collection.
Include ‘invoice’ at the top
Your client’s accounting team receives hundreds of documents every day—from purchase orders to credit notes to quotes. You need to ensure the accounitng team knows what they’re dealing with as soon as it lands in their inbox.
Use a bigger font size and bold text to highlight ‘invoice’ at the top of the document. This will help your client identify the document and process payments faster.
Want to keep your business on its A-game? Start your invoice with a professional business logo and trading name. This section helps communicate your professionalism and credibility.
Here is what you can add to this section:
- Legal name: of your business
- Business address: the address your business is registered at
- Contact details: for easy communication in case of queries or disputes
If you’re stretched for time and resources, you’ll find it tricky to keep up with invoicing—espoecially when starting from scratch every time. Take advantage of customizable invoice templates to speed things up.
Including the client’s contact info is essential when invoicing—it must be clear who the invoice is meant for. Otherwise, you risk having your invoice rejected and payment delayed.
Add the client’s business name, address, and phone number. Most clients want to claim VAT charges and have legal business payment proof, so this is as much for them as it is for you.
Invoice date and number
Inconsistent documents can quickly bury you deep in paperwork. That’s why it’s essential to send a timely invoice with invoice date and number for tracking.
Wave goodbye to frantic searching by assigning invoice numbers and adding dates. Here’s how to go about it:
- Invoice number: Use a chronological number series for invoices. Another way to do this is to combine a unique customer number (72) and job number (001) to create a unique invoice number (#72-001).
- Invoice date: Always include the day you send out an invoice and a due date in line with payment terms. For example, if payment terms call for payment withing a calendar week, your invoice should have a due date exactly 7 days from the send-out date. Remember to use international date formats (February 2, 2022) for international clients.
These details help ensure your invoice ticks all the boxes first time round, and helps when it comes to organizing everything for accounting purposes.
You always want to aim to provide details on what exactly you’re billing for. This helps the client identify what they’re paying for and enables them to better understand the value of your services. It limits confusion when it comes to payment, and provides a professional approach to projects.
Use this section to talk about:
- Service details: include a brief description of key services offered
- Service date: outline the period of contractor services
- Description: add a clear and detailed description of services rendered
- Billing rate: specify whether you are billing by hours or a flat rate
- Quantity: mention number of hours or quantity of products with unit price
- Unit price: calculate the total cost of each service or product
- Invoice terms: clarify currencies when working with international clients and don’t forget to late payment fees
The layout of this section is key for ensuring it’s easy-to-understand and digest. You don’t want clients to be joining dots—you want to guide them from start to finish.
Total amount payable
Once you’ve detailed the different services and their associated costs, you’re ready to communicate a final price. Your clients’ finance team crunch the numbers all day, every day—you don’t want to add to their workload.
Use the space below service details to highlight the total amount payable for your services. Consider doing this in big and bold letters to catch your clients attention. This way you save your client’s time and provide a neat and detailed pricing section.
Running the show involves balancing a lot of different plates—onboarding new clients, sending proposals, creating agreements, providing contractor services, and so much more. You need to ensure you’re paid on time to keep everything running smoothly—the last thing you need is another spinning plate.
Add the right terms and conditions to contractor invoices to encourage early payment and optimize cash position. Here are some common payment terms to consider:
- Payment methods: that you accept i.e. online, cash, credit card, or check
- Payment instructions: for making cheque or online payments—for example, mention where they can go to pay online or who they make the check out to
- Payment schedule: to mention deadlines for making payments
- Late payment fees: for not paying on or before the payment due date
- Early payment discount: that clients can enjoy if they pay within a certain time
- Disclaimers: specify whether you offer a service warranty or money-back guarantee
These terms help ensure you’re always protected when it comes to payment.
Thank you note
You want clients to settle up with a smile—the best way to do is to be polite and thank them at the end of an invoice.
A short and personalized message from you adds warmth both to the invoice and your relationship with the client. You can also ask for testimonials or remind clients about your referral program in this section.
How to Write a Subcontractor Invoice
Creating invoices is an important part of running a contractor business smoothly. That being said, you don’t want to spend all your time at a desk—use contractor invoice templates to automate invoice processes and accounting software to ease payment processing.
Now that you know what subcontractor invoices must include, let’s take a look at how to put it all together.
Understand client expectations
To avoid unnecessary delays, consider speaking to the client and making a proforma invoice.
Knowing what they’re looking for helps you provide the necessary information and prevent misunderstandings. This is especially applicable when you create a new invoice or offer specialized services—everyone needs to be on the same page about payment details and terms.
Personalize professional invoices
Personalization is great for business relationships—one way to do this is to use subcontractor invoice templates. Show your appreciation for and understanding of the client’s business with a personal touch.
The best way to do this is with branding and logos, which you can easily add to all invoice templates with a click of a button. You can also mention how a project enhanced your expertise and values to show the client you’re invested in your work
Organize invoicing processes
Multi-tasking is the enemy of focus, you surely know this by now. If you can’t streamline invoice management, you’ll be sacrificing the precious time you have.
Instead of starting from scratch every time, use a free invoice template and customize it on a case-by-case basis. Bonsai helps you send professional invoices, track payment schedules, invoice status, and schedule automated reminders for ongoing payments.
Give it a final once over
No matter how many invoice you’ve sent in the past, it’s never a bad idea to proofread your invoice. This ensures that your invoice is entirely correct and free from any silly mistakes that could make a big difference.
One way to avoid these silly mistakes is with a free template for your invoices—it’s really easy to get started.
Creating a Subcontractor Invoice is Simple with Bonsai
You can’t rely on a one-size-fits-all approach for subcontractor invoices. The key is to have a process in place that you can modify quickly and easily.
Try automated invoicing with Bonsai to create invoices using free, ready-to-use, and customizable invoice templates. Have one less thing to worry about and run vital business errands on the go!
Here’s how to get started:
- Sign up for free to Bonsai
- Find a subcontractor invoice template
- Customize the contractor invoice template as per your needs
Make your subcontracting business a success with Bonsai’s features, such as:
- Invoice read receipts
- Multiple languages and currencies
- Comprehensive business finance overview
- Automatic payment reminder scheduling
- Highlighted invalid numbers or missing information
- Secure SSL communication for data encryption
The all-in-one business solution is already helping 500,000+ freelancers and SMBs streamline their business processes. Sign up today and access your professional invoice template—plus much, much more.
Subcontractor Invoice FAQs
What is a subcontractor invoice?
A subcontractor invoice breaks down the contractor’s services and project cost, and lays down payment terms.
Make life easier by using a contractor invoice template to organize business finances and manage invoicing better. Find out more about creating invoices here.
How do you write a subcontractor invoice?
A subcontractor invoice usually contains:
- A title
- Business information
- Client information
- Service details
- Total amount payable
- Payment terms
- Thank you note
You can easily create a contractor invoice with ready-to-use contractor invoice templates on Bonsai.