A basic hourly invoice is a document sent by freelancers or contractors to request payment for services based on time worked, typically featuring the provider's contact details, client information, a description of tasks, hours worked, hourly rate, and the total amount due. It acts as a formal record that breaks down costs by task or total hours.
An hours worked invoice template should include the business name, client details, invoice date, work description, hours worked, hourly rate, total amount due, payment terms, and contact information.
What should be included on an hourly invoice template?
In summary, a minimum invoice is a billing practice where a seller sets a minimum amount that must be met before an invoice can be issued. This approach helps improve operational efficiency and profitability by ensuring that each transaction covers the costs of invoicing and payment processing.
Standard Invoice: A formal request for payment after goods or services have been delivered or completed. Proforma Invoice: An initial document sent to buyers in advance of a shipment or delivery of goods, providing a preview of the goods' costs.
This commonly means 30% down payment, 40% after a quality inspection and shipping, and 30% upon receiving the shipment.
Invoices - what they must include
the company name and address of the customer you're invoicing. a clear description of what you're charging for. the date the goods or service were provided (supply date) the date of the invoice.
However the industry range for invoice processing is fairly broad – anywhere from $5 to $15-20 per invoice – with most companies at about $12. This calculator helps you understand where your organization is in terms of its own productivity related to invoice processing and payment.
2/10 net 30 is a trade credit often offered by suppliers to buyers. It represents an agreement that the buyer will receive a 2% discount on the net invoice amount if they pay within 10 days. Otherwise, the full invoice amount is due within 30 days. It's one of the most used formulations of an early payment discount.
In this scheme, the importer and the foreign supplier collude to produce a commercial invoice that lists a value significantly lower than the actual transaction price. Customs officials rely heavily on these invoices to assess duties, so a lower declared value directly translates to lower tariffs.
Add up your billable hours
At the end of your billing cycle, which is based on your invoice schedule, you need to add up the hours you worked on a project. Once you find the sum of your billable hours, multiply that number by your hourly rate to determine how much you need to charge the client for the period.
$40,000 a year is approximately $19.23 per hour, assuming a standard 40-hour workweek (2,080 hours per year). You calculate this by dividing your annual salary by the total working hours in a year: $40,000 / 2,080 hours = $19.23/hour.
This part of the invoice will take up the most physical space and include:
For example, if an employee's hourly rate is $15 and they worked 20 hours during a pay period, you would multiply $15 by 20 to get a total wage of $300 for their paycheck. The amount of time an hourly employee may work each week depends on their role and schedule, as well as the type of business they're working for.
2/10 net 30 means that if the amount due is paid within 10 days, the customer will enjoy a 2% discount. Otherwise, the amount is due in full within 30 days.
3/10 net 30: With this discount term, the buyer can receive 3% off should they pay their bill within the first 10 days. However, if they fail to do so, they'll need to pay the full amount with no discount within 30 days.
Many bookkeepers charge an hourly rate. This averages around $25 to $100 per hour. This all depends on things like their education, work experience, and the tasks they are expected to perform on the job, in addition to standard accounting functions.
GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. To work out the cost of an item including GST, multiply the amount exclusive of GST by 1.1. To work out the GST component, divide the GST inclusive cost by 11.
Payment - obligations
Unless you agree a payment date, the customer must pay you within 30 days of getting your invoice or the goods or service. You can use a statutory demand to formally request payment of what you're owed.
12 common invoicing mistakes (and how to fix them)
To make a simple invoice, start with a template (Word, Excel, or online) and add your business info, client's info, a unique invoice number, date, due date, itemized list of goods/services with costs, subtotals, taxes, and total, plus payment instructions and terms, then save as a PDF and send. Key elements include clear descriptions, quantities, rates, and payment methods to ensure you get paid efficiently.
It is commonplace for us to see directors invoicing for their services through their own limited company/personal service company (PSC). While this consultancy-based service may be allowed in some cases, generally director remuneration should be taxable through standard payroll procedures.