What Goes on an Invoice: Field List for Trades
A service invoice carries your business name, contact and license number; the customer plus the service address when it differs from billing; an invoice number; document date and due date; a PO number on commercial work; line items with quantity, rate and amount; subtotal, discount and tax; deposits subtracted; balance due; how to pay; notes; and a signature line.
What has to be on a service invoice?
Every service invoice answers four things in order: who you are, who owes, what you did, and what is owed now. Start with your legal business name -- the name on your bank account and your W-9 -- with your DBA under it if you trade as something else, because a check written to a name the bank does not recognize bounces back through the customer's accounts payable and restarts the clock. Add phone, email, a remit-to mailing address, and your license number where your trade is licensed. When a commercial customer asks for a tax ID, give an EIN instead of your Social Security number. The IRS issues one free to sole proprietors, and it keeps your SSN out of a PDF that gets forwarded around a property management office. Under that block sit the customer, the invoice number, the two dates, the work, the arithmetic, and the terms. Nothing else is required, and anything else you add is there to stop a phone call.
Why does the invoice number matter more than it looks?
The invoice number is the only handle anyone has on that document once it leaves your truck, so it must be unique, sequential, and never reused. Commercial accounts payable systems key payments to vendor plus invoice number; send a number you have used before and the second one is flagged as a duplicate and quietly held, which is a common reason a payment nobody disputes still does not arrive. Never edit an invoice and resend it under the same number. Issue a new number and reference the original on it, so the customer's file shows two documents instead of one that changed. Year-prefixed sequences keep numbers unique forever without you tracking anything. The number is also what the customer types on a remittance, so keep it short enough to type correctly. On federal work the number earns its keep twice over: the federal Prompt Payment Act makes late-payment interest automatic on a proper invoice, and an invoice number and date are part of what makes it proper. State, county and city agencies run on their own prompt-pay statutes instead, so do not assume the federal clock covers a municipal job.
Why does the service address get its own field?
Because the person paying is often not the person whose house you were standing in. Property managers, landlords, home warranty companies, insurers and general contractors all pay for work at addresses they do not live at, and the invoice has to carry both: bill-to for the payer, service address for the property, with the unit number when there is one. A property manager posts costs to a per-property ledger, so an invoice missing the unit sits unassigned until somebody emails you. The service address also drives the tax question in most states, since the rate usually follows where the work happened rather than where your shop is, and it identifies the property if a lien claim ever gets filed. On commercial and property-manager work, add the PO or work-order number in its own field, not in the notes. Their system matches invoice to PO before a human approves anything, and an invoice over the PO amount stops until the PO is revised.
What do Net 30 and Due on receipt actually commit both sides to?
Net 30 means the full balance is due 30 calendar days from the invoice date -- not 30 business days, and not from whenever the customer opened the envelope. Due on receipt means now, though a company with a weekly check run will still pay on its own schedule. Print both dates: the document date terms run from, and the due date they produce, because computing it for the customer removes the most common excuse. On commercial jobs you may see 2/10 Net 30, which is a 2 percent discount for paying within 10 days, otherwise the whole balance at 30 -- the same terms your supply house offers you. A late fee generally has to be agreed in writing before the work, and many states cap what a business may charge a consumer, so a fee invented at the bottom of an unpaid invoice usually is not collectable. One thing the invoice date does not do in most states is start the lien clock, which runs from the last day you furnished labor or materials.
How should a line item be written?
A line item names the work and the part in one description, then carries a quantity, a unit, a rate and an amount. The unit is what gets argued about, so say it: hours, each, linear feet, squares, per push, per bag, per load. Keep the manufacturer part number inside the description text rather than off in a separate reference column, because a narrow column is the first thing that drops when an invoice is exported to a spreadsheet, printed to a half sheet, or forwarded as a phone photo of the page. Resist lumping. Several plain lines survive scrutiny that one large line does not, and a permit or trip fee reads as a cost you carried rather than padding once it stands on its own row. Zero-amount lines are worth using: a part covered under warranty, something you threw in, and above all work you recommended and the customer declined. Separate labor from materials as well. In many states a lump-sum contract and a time-and-materials contract are taxed differently, so how you break the lines can change the tax answer.
How does sales tax work on a trade invoice?
The hard question is not the rate, it is whether what you did is taxable at all. There is no federal sales tax in the United States; every rule you follow comes from a state, a county or a city, and a handful of states levy no statewide general sales tax at all, though local governments in some of them still do. The distinction that catches trades is improvement versus repair. In most states a contractor who permanently improves real property is treated as the end user of the materials, meaning you pay tax at the supply house and do not collect it from the homeowner, while repair and maintenance work is taxable far more often. Only a handful of states tax services broadly by default; the rest tax an enumerated list and nothing else. Exempt customers -- schools, churches, government agencies, resellers -- need a valid certificate on file, and the invoice should reference it. Ask your state revenue department, not a contractor forum.
What goes at the bottom of the invoice?
Deposits, balance due, payment instructions and notes, in that order, with a signature line where your trade uses one. Show a deposit as a subtraction under the tax line with its date and method -- deposit received May 12, check 1042 -- never by shrinking the line item, because the full contract value has to stay visible and the tax is computed on it. On a job billed in stages, show contract total, billed previously, billed now, and remaining. Balance due is one number and everything above it is arithmetic that supports it. Payment instructions sit directly beneath it: the methods you actually accept, and where a check or an ACH is supposed to land. Notes carry what the line items cannot: two warranty lines rather than one, each naming who honors it and the date its clock starts, because the parts coverage is the manufacturer's promise and the labor coverage is yours; permit and inspection status; and a plain sentence naming what you left alone and why. That last line costs nothing and settles arguments that otherwise have no record at all.
Common questions
What if the customer's accounts payable says there is no PO on file?
You will not be paid until there is one, and a PO issued after the work is done is harder to get than one issued before. Ask for the PO or work-order number when the job is booked, and confirm the dollar authorization it carries -- an invoice that exceeds the authorized amount stops in the same place a missing PO does, and clearing it takes a revised PO or a signed change order. Property managers often use a work-order number instead of a PO; it does the same job. Put the number in its own field on the invoice, and repeat it in the email subject line.
Do I need a signature line on my invoice?
Not on the invoice itself in most cases, but two federal rules make a signature matter elsewhere on the job. The FTC Cooling-Off Rule gives a buyer three business days to cancel most sales signed in their own home, and requires you to hand over two copies of a cancellation notice at signing. EPA RRP requires a certified firm to give the owner or occupant the lead-safety pamphlet and obtain a signed acknowledgment before disturbing paint in housing built before 1978. Several states add their own home-solicitation rules. Beyond that, a customer signature at completion is useful in any trade where the work disappears behind a wall.
Can I add a late fee to an invoice that has already gone unpaid?
Generally no, unless the customer agreed to it in writing before the work started. A fee that appears for the first time on a past-due invoice is a term the customer never accepted, and many states also cap what a business can charge a consumer in finance charges or late fees. Put the late-fee term in your estimate or work authorization, restate it in the notes on every invoice, and it is there when you need it. Check your state's limit before you set a rate, because a fee above the cap can void the whole charge rather than just the excess.
Should my bank details go on the invoice?
Only with a line saying they never change by email. Invoice fraud works by intercepting an emailed PDF, swapping the account details and resending it, and the customer pays a stranger while believing they paid you. A printed sentence -- our banking details never change, call the number on this invoice to verify -- costs nothing and gives your customer a reason to phone before wiring. Make the remit-to name match your bank account and your W-9 exactly, because a mismatch stalls a payment at the customer's bank and generates a 1099 that does not match your return.
How long should I keep copies of my invoices?
Long enough to cover both the IRS and your own warranty. The IRS generally expects records supporting income or a deduction to be kept for three years from filing, longer in some situations, and employment tax records for at least four years. States that collect sales tax often ask for longer, so check yours. Beyond the tax rule, keep an invoice for the length of the workmanship warranty you wrote on it, plus the job photographs that go with it. A dispute usually arrives at the end of the warranty term, not the beginning.