From consultancy, freelancing, home modeling to tutoring services, independent contractors provide a wide range of services around the globe. No matter what field a contractor belongs to, he/she needs to be paid on time for his/her services.
But it is not always that simple to receive payments and calculate taxations if you are working independently. This is where you will need contractor invoice templates to get paid for the services professionally.
This invoice is useful in calculating an accurate bill of the hours and days worked as per the predetermined rate of pay.
What Is an Independent Contractor Invoice?
The Freelance Invoice or Independent Contractor Invoice is a document that details all the services rendered by the contractor to the clients. These invoices help in maintaining the financial and service records of the contractors.
Depending upon the size of the project, the billings can be provided either after the services or as per milestones in case of long-term projects.
What Is the Difference Between an Independent Contractor and an Employee?
The essential legal differences between an independent contractor and an employee are as follows:
- Employment Laws: The employees are covered by a number of state and federal employment & labor laws, whereas an independent contractor is supported by none.
- Taxation: Though, both of them have to provide name, address, and social security numbers, but employees are required to submit tax filing status and a number of exemptions, on the other hand, contractors give identification numbers & certification about backup withholding.
- Hiring Practice: Employees are generally hired by human resource departments, whereas independent contractors usually interact in-person with individuals and departments to provide services.
- Payment Method: Normally, employees earn fixed salaries and independent contractors earn an hourly, daily, or weekly rate.
What to Include in an Independent Contractor Invoice?
Your Contact & Client’s Information
Includes email addresses, phone numbers, and area codes of the client and the contractor. The information can split into either side of the invoice and can be further broken down in several lines for readability.
It is a usual practice to provide the invoice number to keep a record of invoices.
It is necessary to note down the date on which invoice was sent to the client to keep a reference for the future.
The other times to be mentioned on the invoice are for the services which are due to be delivered. Usually, invoices are 30-60-day timelines, but they can vary on the client’s preference.
Terms of Payment
In order to maintain transparency, the contractor is required to inform the client about the preferred mode of payment in the invoice so that payments are sent duly in time.
Also, contractors can add any type of late fees or additional charges in case the client fails to deliver amounts on time.
Breakdown of Services
In the last section of the independent contractor invoice, all the services are listed along with the payments so that the client should have a clear idea about what they are paying for. All the fees are summed up to state a total invoice amount at the end.
All the independent contractors need a reliable, sustainable, and professional way to receive their due payments against the services they provide.
An independent contractor invoice template not only makes sure that your client is equipped with all required information about services and billing but also helps you to be at the top of your finances by maintaining the right track of your taxes.
If you are still having trouble in developing your invoice, you can visit CocoSign’s library to get your hands on fully customized independent contractor invoice templates. You will also find a variety of other useful invoice templates on CocoSign.