How to Create an Invoice for Billable Hours

It is customary for independent contractors, consultants and lawyers to charge by the hour. This is different from an hourly employee. If you are a contractor, consultant or lawyer, you are usually hired for a definite period of time, and the company hiring you does not pay taxes and employment insurance. A contract between the client and the contractor should lay out the rate for billable hours, the scope of work included, and an estimate of how long the work should take.

Instructions

1

Agree with the client on what charges are included. The hours spent actually doing the work are to be billed, but what about meetings, transportation and other miscellaneous items? It is imperative to have a mutual agreement ahead of time so that there is no disagreement between you and the client, and so you know what to keep track of. Once the information is agreed on, put the information in a contract.

2

Keep track of time. You can use an online time-tracking system like Freshbooks or Simplifythis, or you can create a simple time sheet in Excel. If you keep your time sheet in Excel, be sure to make it organized so that the hours worked, and the nature of the work -- meetings, writing, editing, research, etc. -- are easy to understand. If a client has a dispute on what you've done, you want to have a clear record for your reference. The clear record will also help you get an idea of how long it takes you to do routine tasks. In the long run, the patterns will help you estimate how long a job should take.

3

Use your online time-tracking software or Excel to create an invoice using a template. Freshbooks will automatically create an invoice. You can format an Excel spreadsheet to look like an invoice, then import data from your time sheet into a formula on your invoice. You can also do the addition using a calculator -- multiplying the hours you worked by your hourly rate -- and create an invoice using a template in Microsoft Word or Paypal. If you have had a client for a while, they may not require a detailed list of what you have done, and you can just hang onto it in the case of a dispute.

4

Include a time period for payment on your invoice. Be sure to add legal language to your invoice making the client aware that they have a time period to make payment and that late payments get a charge for interest. You can agree with your client at the beginning of the assignment on the schedule of payment. However, customary terms are 30 days before interest is accrued.

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