How to write an invoice for services?
Not everyone is in the business of selling tangible products. Instead, many entrepreneurs receive payment for their time and valuable skills. Today, we'll show you how to write an invoice for services rendered, so you can more effectively bill your clients after completing a project.
What is a service invoice?
An invoice is a document that a company sends to a customer. It serves to request payment for goods or services. Invoices function like bills, and many times, the two terms are used interchangeably. However, an invoice typically contains a bit more information than a bill -- and this is certainly true for a service-based invoice.
A service invoice is a document that requests payment for services provided. It tends to be organized around a particular project.
Service invoices can be used by a variety of professionals, including:
- Web designers and developers
- Construction companies
- General contractors
Basically, anytime you complete a job or project, you'll send an invoice for services rendered during the process. In some cases, you might send a service invoice after completing a particular phase of a larger project, though this requires agreement with your client beforehand so you both understand the invoicing process.
Use an invoice template
One of the easiest ways to send an invoice for services rendered is to use an invoice template. Business invoice templates can save you time, as you won't have to write invoices from scratch after every job. This can be especially helpful when you're providing a standardized service or working on a routine basis.
An invoice template will keep your own business details the same for each document, but provide space for you to fill in the information that is unique to a specific client.
At Invoice2go, a Bill.com company, we provide free invoice templates on our website. We offer customizable invoice templates that can be used for a variety of industries, including:
- Creative professionals
You can download a free invoice template as a Microsoft Word document, Excel spreadsheet, or a PDF file that can be easily sent to your valued clients.
How to create invoices for a service-based business
If you'd prefer not to use a free invoice template, you can always create your own. Below, we'll walk you through the step-by-step process of creating your own professional invoices. You can even convert the finished product into an invoice template that can be reused in the future.
1. Start with your company logo
Your service invoices can be used to help build your brand. Simply insert your business logo on the top of each invoice (usually centered) just as you might when you send a business letter.
If you don't have a business logo, write your company name on the very top in bold, distinct lettering. This will help your business stand out and increase brand awareness with your clients.
2. Clearly label the document as an "invoice"
Before you list any contact information for you or your client, it's helpful to label the document as an actual invoice. That way your clients instantly recognize the invoice document and understand its specific purpose. Plus, it may prompt them to skim down to see the due date, ensuring that you receive timely payments for all the services you've provided.
3. List your business name and contact information
Your business name may already be in your logo, but it never hurts to repeat it when you're listing your business information. Beneath your name, include as many contact details as necessary.
This includes such information as:
- Your business address
- Personal point-of-contact
- Phone number
- Fax number
- Website URL
The goal is to provide your clients with the means to contact you if they have any questions about the invoice.
When creating an invoice template, you can simply leave the above information in place, since this information will remain constant for every service invoice you create.
4. Add your client's name and contact information
Below your business details, you'll list your customer information. This includes their contact details, such as their business name, business address, and any specific contact information relating to their business.
In some cases, you might be dealing with one particular individual or the customer's billing department. You can specify these individuals by including "ATTN:" at and their name before listing the other customer details.
5. Assign a unique invoice number
Every service invoice you send should include a unique invoice number. This number serves the invoice process by providing a way to keep track of your service invoices. You can also match them with purchase orders or other data for accounting and bookkeeping purposes.
If you're not sure of the proper invoice number format, don't sweat it. Simply label your first invoice as "001," and you'll be able to submit roughly 1,000 invoices before having to change your numbering system.
Some small business owners like to include a specific customer number as part of their numbering method, which can also help you to group invoices by client.
6. Record the invoice date
Below the invoice number, record the invoice date. Remember, this is the issuing date of the service invoice, not the date that your professional services were provided. This can be helpful in establishing due dates and serve as a timeline for tracking payment status.
Alternatively, some small businesses might simply include the date of their billing period rather than the actual date of the invoice. This means you can record a monthly period such as February 1--February 28, or whatever length of time defines your company's standard billing period.
7. Provide a list of all services rendered
Here is where your service invoice will differ most from other invoice types. When you write an invoice as a retailer or supply company, you would use this section to document all of the products sold to your client, as well as the cost of each item.
A service-based business will produce a different kind of invoice altogether. To invoice for services rendered, you'll compile a detailed list of each service or task you performed. This includes:
- A brief description of the services provided
- The amount of time spent on each service
- The rate of pay for each service; could be a flat or hourly rate
- The dates upon which each service was performed
Be as specific as possible. A service-based invoice should make it easy for your customers to review your invoice and understand exactly what you're billing them for.
8. Record the subtotal
Once you finalize the list of services rendered on your invoice, you can calculate the subtotal. Remember that for a service-based invoice, you'll likely be multiplying the hourly cost of your services by the number of hours you or your staff members spent working on a project.
9. Record the grand total
Beneath the subtotal, you can record the grand total. This will include sales tax, any additional fees or charges, and any discounts that may apply. For example, if there are any delivery fees or processing charges, you may apply them here to calculate the grand total. Just make sure to talk to your clients beforehand so they aren't surprised by any surcharges once they receive the final invoice!
10. List your payment methods
What payment methods do you accept? It often helps your clients pay on time when they have multiple payment options to choose from.
At the same time, if you have a way that you'd prefer to receive payment, you can specify this method here under your payment details.
11. Specify any payment terms
Some small businesses set a payment due date and assess fees for any late payments they receive. This is often 10% to 15% of the invoice, though the exact amount is up to each business owner.
Likewise, some small businesses set a due date as far out as 30 days from the invoice date.
These payment terms can help you avoid delayed payment, though as with other details, it's important to be upfront with your clients so they know what to expect. You can also encourage customers to pay early by offering a modest (5% to 10%) discount for anyone who pays within 7 days of receiving an invoice.
12. Thank the customer
Sending a professional invoice doesn't mean you can't be friendly! Offering your customer a brief word of thanks can go a long way to cultivating strong client relationships. It may even encourage repeat business.
You can also repeat your most immediate contact information here so the customer can hire you for another project if they were pleased with your work from the first round.
Use the latest invoice software
The methods we've shown you can be a great way to create your own invoice template, but if you're a solo entrepreneur, independent contractor, or freelancer you can save even more time by relying on an invoicing software platform. These innovative systems allow you and your customers to conduct business with greater ease. Helpful features allow you to perform such essential small business functions as:
- Creating and sending invoices
- Collect online payments
- Track payment status
- Sending automated payment reminders
When you allow clients to pay online, you'll get paid faster without the hassle of a lot of follow up. You can use this software regardless of whether you sell products or offer a specialized service. And when you trust an innovative software provider like Invoice2go, you can create and send invoices with ease. You can even collect payment through the convenient mobile app!
Changing the way you do business
As a small business owner, you know better than anyone that time is money. So why are you spending your time submitting invoices the old-fashioned way? With Invoice2go, you can save time by using an invoice template and cutting-edge software to send invoices and collect payments faster than ever before.
If you like the free invoice templates we offer on our website, then consider signing up for our free 30-day trial. You'll get access to a wealth of resources that can streamline the way you provide services to your clients.
Frequently asked questions
Got questions for the invoicing experts? Here are some of the most common questions we hear from clients in service-based industries:
This is a common question, and unfortunately, the answer is "no." An invoice is nothing more than a request for payment. By itself, it does not constitute a legally-binding arrangement, like a contract. Customers are able to dispute the contents of the invoice, which can be problematic since it's harder to refund the client for services rendered.
If the client had previously submitted a purchase order -- and both you and the client had signed it -- or if you had drawn up a business contract, then you have legal recourse in the event of an unpaid invoice. But otherwise, no; an invoice is not a legally-binding document.
What if your company sells products and provides services? Should you use a different numbering system for each type of invoice?
Obviously, every invoice should have its own unique number, which helps you and your customers keep track of their orders. While it's possible to use two different numbering systems, this is often just more confusing. It will be simpler to use the same numbering system for your service invoices and your product invoices.
While many of the details listed on your invoice will remain constant, the description of services will look very different from invoices sent for products or merchandise.
If you offer multiple types of services, you might want to consider using different invoice templates. You can use one template for the sale of products, another for one type of service, and additional templates that cover any other services if they differ significantly from one another.
With that being said, the main section that should change is the description of services rendered (Step 7 above). Maintaining consistency in other fields can help avoid confusion when you're communicating with clients.