How to Make a Construction Invoice: Guide + Template

Ever find yourself scrambling to put together a construction invoice after a long day at work?

You’re not alone. For many contractors, invoicing is usually an afterthought—until it’s time to get paid. And that’s when the missing details, inaccurate amounts, and a confusing layout can lead to delayed payments and headaches.

But what if we told you that generating construction invoices doesn’t have to be this hard or complicated?

In this guide, we’ll show you exactly how to make a construction invoice that’s easy to customize and helps you get paid faster. Let’s get started!

What is a Construction Invoice?

A construction invoice is a document that includes the payment details and an account of the work completed and materials provided over a certain time period, usually a month. It is a bill issued by contractors, subcontractors, or any professional in the construction industry to their clients for the services provided.

It is a formal request for payment that outlines the specifics of the services, and goods supplied during a construction project, and the final amount due.

A construction invoice also serves as an essential document for accounting, tax, and legal purposes, both for the issuer and the recipient. Professionals can generate invoices using invoicing software or manually.

4 Types of Construction Invoices

There are various ways construction professionals can generate invoices.

What are they?

Let’s take a look.

1. Time & materials billing method

You can use the time & materials billing method when you want to charge based on hours worked and materials used. The time and billing invoice template includes a breakdown of labor hours, rates, materials, and associated costs. This method is ideal if you’re working on flexible or ongoing projects where costs vary.

2. Cost plus fixed fee invoices

A cost-plus fixed fee invoice is used in the construction industry where a contractor charges the client for the actual costs of the project (labor, materials, etc.) and a predetermined, fixed fee for their services. This type of construction invoice is ideal if the scope or duration might be uncertain but the contractor is guaranteed a set fee for their work regardless of the total project cost.

3. Lump sum invoice template

A lump sum construction invoice is an agreed-upon invoice paid in a single installment. The fixed amount is decided before the work begins. There’s no need to think about progress-based billing or tracking the costs and materials. This type of invoicing is ideal for short-term projects where you can foresee the project costs.

4. Progress billing Invoice

A progress billing construction invoice bills for a portion of the total cost as specific milestones are reached. They’re issued through the course of the project as major tasks are completed. This is helpful for contractors to maintain cash flow throughout lengthy construction projects.

5 Steps to Creating a Construction Invoice

You can create a construction invoice in 5 steps:

Step 1: Download a construction invoice template

First things first, you need to download a construction invoice template from InvoiceOwl. You can start with creating invoices from scratch manually but an invoice template is a good headstart and will make the process much easier.

Choose an invoice template specifically designed for construction projects. The template will allow you to customize and include essential sections and project details. InvoiceOwl offers a range of free construction invoice templates with pre-built options.

Step 2: Customize your invoice

You need to customize the invoice and add your brand flavors to add the differentiating factor. Add the following details:

• Construction business info: Include your business name, logo, address, colors, address, phone number, and email.
• Client information: Enter accurate details of the client such as the name, company name, and contact details.
• Invoice number & date: Assign a unique invoice number for every free invoice template you generate and include the issue date for easy tracking.
• Tax information: It is important to be transparent about the tax registration details for both your business and the client.

Step 3: Add construction project details

First, note the type of invoice you’re creating. Based on that, break down the cost of your services. This will help you define the scope of work. Clearly outline the tasks performed, materials supplied, service descriptions, and labor rendered. Here’s the list you should consider while adding construction project details:

• An itemized list of materials used
• Labor hours
• Subcontractor services
• Service descriptions (Structural and framing work, roofing, site preparation, flooring installation, foundation work, etc)
• Project timeline (start and end dates of the project or specific phases)

Step 4: Outline payment terms

The key to receiving timely invoices is to be as clear as you can about the final amount, the accepted methods of payment, and the charges for late fees. Some of the aspects you need to take care of while outlining payment terms in a construction invoice template are:

• Payment due date: When is the payment due? Note the date and the time limit. For example, “Due within 30 days.”
• Late fees: Mention the penalties for late payments, if any. For example, “Late payments may incur a fee of 5% in the total amount.”
• Accepted payment methods: List the accepted methods of payment, such as bank transfer, credit card, check, or digital payment methods like PayPal, to make it easy for clients to make their payments.
• Retention fees: If applicable, specify any percentage of the payment that will be retained until the construction project completion. For example, “A 5% retention fee will be withheld from the total payment until the project is fully completed.”

Step 5: Calculate the cost

Finally, tally the total that includes all the charges per service, per hour, and resource, along with added taxes. Cost calculations will include:

• Total labor costs: You need to multiply the labor hours by hourly rates or use a flat fee, depending on the agreement. Ensure that the rate adheres to the minimum wage requirement.
• Material costs: State the cost of all materials used on the project such as concrete, lumber, and electric wiring, and include the taxes.
• Other expenses: Add any additional costs like equipment rental or subcontractor fees.
• Final amount: Add the labor costs, material costs, and additional expenses, apply taxes or discounts, and add the final amount.

What Should Construction Invoice Templates Include?

While you’re creating construction invoicing, including the following elements is a must.

• Invoice number: This differentiates one invoice from another, makes record-keeping easy, and ensures clear payment references.
• Invoice date: It marks the issuance of the invoice and establishes the payment timelines.
• Business details: This ensures that the client knows who to contact and helps legitimize the invoice with accurate contact details.
• Client details: It specifies who the bill is addressed to, making sure the right client is accountable for payment.
• Service description: It details the work done and ensures clarity on what the client is charged for.
• Hours worked: It outlines the time spent on labor, giving transparency on how much work was done and at what rate.
• Tax: This indicates the applicable taxes that help you comply with the tax laws and justify the total amount.
• Payment information: It details the method of payment, and the final due date, providing clarity on acceptable payment methods and terms.
• Amount due: It summarizes the total amount so the client is clear as to how much is due.

Free Construction Invoice Template

A sample construction invoice template is essential to creating quick and easy invoices so that you can spend more hours doing what matters the most for your business.

You can download the free construction invoice template, customize it, and add details, and you’re ready to send. Get access to templates in various formats such as Google Docs, Google Sheets, MS Word, MS Excel, and PDF.

Tips for Creating a Construction Invoice

Sure, you can prepare a construction invoice from invoice templates and call it a day. However, if you want to ensure professionalism and improve your brand recall, you need to take additional steps to create an effective billing process.

1. Consistent formatting

Consistency is the key to brand recall and professionalism. Practice formatting by including clear headings, uniform fonts, and spacing. It makes your invoices easy to read and demonstrates professionalism, improving the chances of prompt payments.

2. Use invoicing software

If you want to create numerous invoices, maintain the same consistency, and use extra features, invoicing software is your solution. It simplifies the entire invoice generation process by automating calculations and ensuring branded format, tracking, multi-company management, and reporting. It also allows you to create estimates, and integrate with different payment methods. These features help you save time and reduce human errors.

3. Build better estimates

Creating estimates is a good practice for the invoice generation process as it provides clients with realistic estimates upfront. You avoid surprises and disputes down the line and can give a clear picture of the expected costs. If you’re using an invoicing tool like InvoiceOwl, you can also automate the process of creating estimates for every client.

4. Establish clear payment terms

If you want faster payments, you need to reduce the back-and-forth as much as possible. Establishing clear payment terms, which include specifying when the payment is due, any late fees for overdue payments, and accepted payment methods, sets expectations upfront and helps avoid delayed or incomplete payments.

5. Use e-signatures

If you want to expedite the process of sending invoices, use e-signatures where you can digitally sign off the invoices and share them with clients. You can find this feature in invoicing tools like InvoiceOwl. This significantly reduces paperwork and helps you quickly share invoices without generating physical copies for the same.

6. Detail the descriptions

With detailed descriptions of all services and materials, you’re making your invoice as clear as possible. In the construction invoice template, break down the labor hours, materials used, and any subcontractor services. Detailed descriptions give clients full transparency, reducing the likelihood of disputes or misunderstandings.

Build Concrete Construction Invoices with InvoiceOwl’s Invoicing Tool

Creating a professional and clear construction invoicing is central to getting paid on time and maintaining strong client relationships. If you’re looking to simplify and streamline your invoicing process, use a dedicated invoicing tool that helps you save time and reduce errors.

InvoiceOwl offers easy-to-use templates and automated features designed specifically for contractors and small businesses. Best of all, you can try it for free and see how it can help you get paid faster and more efficiently.