What should I include in my subcontractor invoice to ensure prompt payment?

Include essential details like the invoice number, your business name, client information, a detailed breakdown of services, payment terms, and due dates. It’s also helpful to reference the contract and any change orders. Clarity and professionalism in your invoice can greatly influence payment speed and client satisfaction.

How do I handle billing for change orders in my invoices?

Clearly itemize change orders on your invoice with descriptions and agreed-upon costs. Reference any signed agreements or addendums related to the change. It’s crucial to communicate these changes to clients beforehand to avoid disputes. Keeping thorough documentation will help ensure smoother transactions.

What are the best practices for managing progress payments in contracting?

Establish a clear payment schedule based on project milestones in your contract. Include these milestones in your invoices, specifying what was completed. Regular communication with your client about upcoming payments and any potential delays in work will help maintain trust and ensure timely payments.

How can I ensure compliance with tax regulations when invoicing?

Stay informed about local and state tax laws that apply to your services. Use accounting software or invoice templates that automatically calculate applicable taxes. Keep records of all transactions and consult with a tax professional to ensure your invoices are compliant and reduce the risk of audits.

Subcontractor Invoice Template

Professional Subcontractor Invoice Template

Streamline your subcontractor invoicing with our customizable template, designed to save you time and ensure accurate, professional billing.

Free to use

Professional design

Instant download

Everything You Need for Subcontractor Invoicing

Our subcontractor invoice template includes all the features you need to create professional invoices and get paid faster.

Automated Billing

Eliminate manual errors with automated invoicing, ensuring accurate and timely billing for all your subcontracted work.

Customizable Templates

Tailor invoices to reflect your brand and project specifics, presenting a professional image to clients.

Progress Payment Tracking

Easily manage and track progress payments, ensuring you get paid for completed milestones without delays.

Itemized Service Details

Provide clear, detailed breakdowns of services rendered, helping clients understand the value of your work.

Tax Compliance Features

Stay compliant with local and state tax regulations while simplifying your tax reporting process with built-in calculations.

Mobile Access

Invoice on-the-go with mobile-friendly templates, making billing convenient no matter where your work takes you.

Complete Guide to Subcontractor Invoicing

As a subcontractor, you play a vital role in completing larger projects, providing specialized skills that prime contractors depend on. Whether you're in construction, electrical, plumbing, HVAC, or any trade, professional invoicing ensures you get paid promptly for your work and maintains good relationships with the contractors who hire you. This guide covers everything subcontractors need to know about professional invoicing.

$50-$150/hour by trade

Average Subcontractor Rate

Net 30 or Pay-when-paid

Standard Payment Terms

50%+

Experience Late Payments

Essential Elements of a Subcontractor Invoice

Business Information: Your company name, address, phone, email, license number, and insurance info.
General Contractor Details: GC company name, project manager, billing address, and contact information.
Project Information: Project name, job site address, and contract/PO number.
Invoice Number & Date: Sequential invoice number and issue date.
Payment Application Number: If progress billing: which payment application this is.
Work Performed: Detailed description of completed work tied to contract scope.
Labor: Hours worked, crew size, labor rates, and total labor cost.
Materials: Materials used with quantities, unit prices, and totals.
Percent Complete: Percentage of contracted work completed to date.
Previous Payments: Amount previously billed and paid.
Retainage: Amount being held (typically 5-10%).
Current Amount Due: Net amount due this billing period.
Lien Waiver Status: Conditional/unconditional waiver information.

Subcontractor Invoicing Best Practices

Match Contract Terms: Invoice exactly per your subcontract agreement. Match line items and rates.
Invoice on Schedule: Bill per the GC's payment cycle. Monthly or per milestone as specified.
Document Everything: Photos, daily logs, delivery tickets—proof of work completed.
Submit Required Paperwork: Lien waivers, certified payroll, insurance certs with each invoice.
Track Change Orders: Only bill for approved change orders with signed documentation.
Reference Contract Numbers: Include subcontract number and PO on every invoice.
Meet Submission Deadlines: Late invoices often get pushed to the next pay cycle.
Maintain Communication: Keep the GC project manager informed of billing expectations.
Follow Up Promptly: Don't let invoices sit unpaid. Follow the GC's payment timeline.
Protect Your Lien Rights: File preliminary notices and meet all lien deadlines.

Subcontractor Billing Methods

Common billing approaches for subcontractors:

Time & Materials (T&M):

Bill actual hours + materials
Include markup on materials (10-20%)
Track time meticulously
Provide detailed backup

Fixed Price/Lump Sum:

Total price for scope
Bill based on % complete
Schedule of values required
Change orders for additional work

Unit Price:

Price per unit installed
Count verified with GC
Common for repetitive work
Easy to track and bill

Cost Plus:

Actual costs + markup %
Typical markup: 15-25%
Full documentation required
Open-book accounting

Progress Billing:

Monthly pay applications
Based on % complete
Subject to retainage
AIA G702/G703 forms common

Payment Terms for Subcontractors

Standard subcontractor payment practices:

Payment Timing:

"Pay-when-paid": GC pays you after owner pays them
Net 30 from invoice approval
Per milestone completion
Monthly progress payments

Retainage:

Typically 5-10% withheld
Released at project completion
Or at substantial completion
Per subcontract terms

Lien Waivers:

Conditional: before payment
Unconditional: after payment
Required for payment processing
Match waiver to invoice amount

Required Documents:

Certified payroll (prevailing wage jobs)
Insurance certificates
Safety documentation
Material receipts/invoices

Protecting Yourself:

Know your lien rights
File preliminary notices
Document all approvals
Maintain communication

Common Subcontractor Invoicing Mistakes to Avoid

Missing Lien Deadlines: Know your state's lien law deadlines and never miss them.
Billing Without Approval: Only invoice for work that's been inspected and approved.
No Contract Reference: Always reference your subcontract and PO numbers.
Mismatched Line Items: Invoice line items must match your contract schedule of values.
Unsigned Change Orders: Never perform or bill extra work without signed authorization.
Missing Documentation: Keep photos, logs, and receipts for everything you bill.
Late Submissions: Submit invoices on time per the GC's schedule.
Wrong Lien Waivers: Use correct waiver type (conditional vs. unconditional).
Ignoring Retainage: Track retainage and request release when entitled.
Poor Communication: Keep the GC informed about any billing or payment issues.