A contractor should write down the price, get approval, track the work and invoice from that record. The usual flow uses the estimate, work order, invoice and mileage log.
Documents contractors use
- Estimate. Send it after the site visit. List labor and materials as separate lines. Add how long the price stays valid.
- Work order. Use it once the customer says yes. It records scope, price, a target date and access notes. The customer's written approval makes the job authorized.
- Invoice. Create it when work is done, or at stages on longer jobs. Copy the estimate lines, then change what moved.
- Mileage log. Keep one for travel between job sites. It supports reimbursement from a client or your own tax records.
How billing usually works
Small jobs and large jobs bill differently.
- Per job. One price for a defined scope. Quick to invoice, but changes need a new work order.
- Hourly. Hours times a rate, plus materials. Keep a timesheet and read timesheets for billing.
- Deposit and balance. Take part of the price upfront for materials. Invoice the rest on completion.
- Mixed. Some customers pay by the job, others by the hour. Label each invoice so the basis is clear.
For most jobs, the estimate becomes the invoice. The guide on estimate to paid invoice walks through each step. Extra work that the customer asks for on site goes on an updated work order before you start it.
Common invoicing mistakes
- Doing added work without writing it down.
- Combining labor and materials in one line.
- Invoicing weeks after the job, when the customer has forgotten the details.
- Skipping the due date. Use the invoice due date calculator.
- Rebuilding mileage from memory at year end.
- Not saving PDFs. The tools store nothing, so download and file each one.
Useful calculators and guides
- Contractor invoice calculator to total labor and materials.
- Hourly invoice calculator to price hours.
- Billable hours calculator to total time worked.
- Invoice due date calculator to set payment dates.
Guides: work orders, estimate vs quote and invoice deposits.
Frequently asked questions
- Should I bill by the hour or by the job?
- Bill by the job when you can define the work and want to keep gains from fast work. Bill by the hour when the scope is unclear. Tell the customer which method you use before you start.
- How do I turn an estimate into an invoice?
- When the customer accepts and the work is done, copy the estimate lines into a new invoice. Update changed quantities and prices, add a due date and give it a new number.
- Do I need a work order for small jobs?
- It helps even on small jobs. A short work order records scope, price and the customer's approval. It protects you if the customer later disputes the work.
- How do I record mileage between job sites?
- Note each trip soon after you drive it. Record date, start, destination, distance and purpose. Rules for reimbursement and tax deduction differ by country, so check with your accountant.
- Should I charge for materials separately?
- Yes, in most cases. List materials and labor as separate lines. The customer sees what they pay for, and you can add an agreed markup on materials.