How to Write an Invoice for Hours Worked

An invoice for hours worked is a formal request for payment from a service provider, such as a freelancer or contractor, to a client. This document itemizes the time spent on specific tasks or projects, detailing the services rendered and the agreed-upon hourly rate. Its purpose is to formalize the financial transaction, providing both parties with a clear record of services and the amount owed. Sending a professional invoice helps maintain clear communication, supports accurate financial tracking, and ensures timely compensation.

Essential Invoice Components

Every invoice for hours worked must include specific details for clarity and efficient payment processing. The service provider’s full business name, physical address, email, and phone number should be prominently displayed. This identifies who is requesting payment and provides client contact information. Similarly, the client’s complete business name, billing address, and contact person are necessary for proper routing and record-keeping.

A unique invoice number is crucial for tracking transactions and aiding in accounting. This number typically follows a sequential pattern (e.g., INV-001, 2025-001). The invoice date indicates when the document was issued, while the date(s) of service specify the period work was performed. Itemized descriptions of services are also necessary, clearly outlining each task or project, such as “Website Development – Phase 1” or “Marketing Consultation – Q2 Strategy.”

For each service, the agreed-upon hourly rate must be stated, along with the total hours worked for that specific item. This transparency helps the client verify the charges against the work performed. Payment terms, such as “Net 30” (payment due 30 days from the invoice date) or “Due upon receipt,” clearly define the expected payment timeframe. Accepted payment methods, like bank transfers, checks, or online payment platforms (e.g., ACH, credit card processors), should also be specified to facilitate the transaction.

Any applicable late payment policies, such as a percentage fee on overdue balances, should be clearly stated to encourage timely payment. If sales tax applies, it must be calculated and listed as a separate line item for compliance. Discounts, if offered, should also be clearly itemized. Finally, the subtotal of all services, any taxes or discounts, and the grand total amount due must be clearly presented, providing a comprehensive financial summary.

Calculating and Presenting Hours Worked

Accurately tracking hours worked is foundational to generating a precise invoice. Many service providers utilize dedicated time-tracking software, offering features like project-based tracking, task breakdowns, and automated reports. Alternatively, detailed spreadsheets or manual logs can serve the purpose, provided they maintain a consistent record of time spent. The chosen method should reliably capture start and end times, breaks, and specific tasks.

When presenting hours on the invoice, clarity is paramount to avoid client confusion. Hours can be itemized by daily breakdown, showing the specific hours worked each day on a project, or by weekly totals for longer engagements. Presenting hours by task or project is also effective, especially when different services or roles carry varying hourly rates. For example, an invoice might list “Content Creation – Blog Posts (15 hours @ $60/hour)” and “Social Media Management (10 hours @ $50/hour).”

Calculating the total amount due involves multiplying the recorded hours for each service by its corresponding agreed-upon hourly rate. For instance, 20 hours of consulting work at $100 per hour would result in a $2,000 charge for that specific service. If different services or roles command different rates, each must be calculated separately before summing them for the subtotal. This meticulous approach ensures that all work performed is accounted for and billed correctly.

Invoice Delivery and Record Keeping

Once an invoice for hours worked is complete, delivering it promptly and professionally is the next step. Emailing the invoice as a PDF attachment is a widely accepted and efficient method, allowing for quick delivery and easy digital filing by the client. Professional invoicing software often includes features for sending invoices directly, sometimes with client portals for viewing and payment. For clients who prefer physical documentation, mailing a printed copy remains an option, though it typically involves longer delivery times.

When sending invoices via email, use a clear and professional subject line, such as “Invoice [Invoice Number] from [Your Business Name],” to ensure it is recognized. Following up to confirm receipt, especially for new clients, can prevent delays. The goal is to ensure the invoice reaches the correct contact person and is easily accessible for their accounting processes.

Maintaining accurate records of all sent invoices and corresponding payments is a crucial administrative practice. Digital folders, cloud storage, or integrated accounting software provide secure ways to store these documents. For tax purposes, the Internal Revenue Service (IRS) generally requires businesses to keep records that support income and deductions for several years. This typically means three years from the date a tax return was filed or two years from the date the tax was paid, whichever is later. Some records, like those related to employment taxes, must be kept for four years.

Good record keeping extends beyond tax compliance, providing a clear financial history that supports client communication and helps resolve payment disputes. Accessible records allow you to quickly verify services, hours worked, and payments received, fostering trust and professionalism. This systematic approach ensures financial clarity and supports the long-term health of your business.