Creating an Invoice for Consulting Services

Consultants operate as independent businesses, and must be adept and proficient when it comes to creating invoices for consulting services. This entails that he or she must keep accurate records of the amount of time spent on a project in order to invoice clients correctly and receive due remuneration.

If you are new to consultancy, you may be wondering how to invoice clients for your services. In this article, we’ll take you through the A-Z of creating a consulting fee invoice.

How to invoice as a consultant

Consultants must create invoices with a precise summary of services, hours worked and their expected payment. The following points will explain how to create an invoice for consulting work effectively and professionally.

Closely track hours for each client

For the most part, consulting services are billed on an hourly basis. In the case that you have several clients simultaneously, it’s important to have an efficient and accurate method of tracking the time you spend on each project. It will not be sufficient for you to merely have tracked the hours you have worked in total, but rather how many hours you spent working for respective clients’ individual projects.

Some consultants choose to break down their hours into different subsections on the invoice. For example, hours spent in research, development, application etc. This allows the client to clearly see the extent of the services they are paying for.

While Excel and worksheets are suitable for tracking hours, many consultants prefer to use time-tracking applications such as Time Analytics and Toggl Track.

Comply with all relevant tax laws

Tax laws and regulations will vary according to your location, income and status. Before charging a consulting fee invoice, you must be in compliance with all applicable tax laws.

Include a header

Before writing your first consulting invoice, you will need to create a header which will appear on every billing document.

This header must include:

• The logo of your company

• Contact information for your business (name, address, telephone number, email)

• Clearly state “Invoice” so that a client will immediately recognise the purpose of the document

Include client’s contact information

Beneath the header, you must list the contact details of the client. If your client is a large business, the contact information required will probably be that of somebody working in the billing department, rather than the individual with whom you have direct contact.

Include an invoice date

Make sure you include the date you created the invoice. This will ensure that both you and your client can maintain accurate bookkeeping.

Assign a number to each invoices

Giving a unique number to each invoice you create will ensure that you or the client are easily able to refer to it in future. It will also help you to keep all your invoices well organised.

The most straightforward way to number invoices is sequentially. For example, your first invoice will be numbered #001, the second will be #002, etc. However, if you prefer, you can also include the date of invoice.

List services clearly

It’s very important to clearly list each service you have provided.

This itemised list will include:

• Brief title or summary of each service

• Number hours spent

• Hourly rate

• Subtotal (no. hours x rate)

For clarity, this information can be presented in a table.

Declare your terms of payment

The terms of payment include the payment method you accept. This might include bank transfer, credit card payment, cash or cheque. Ideally you will have already discussed this with your client before signing the contract – see our guide to client communication skills – but it’s a good idea to clearly reiterate your preference on the invoice.

If you have a late payment policy, i.e., you charge a fee for overdue payments, this should also be stated on the invoice with details of the fee.

State the payment due date

You must include the date you expect the payment due on the invoice. To make the date extra visible you can put it in bold or a different colour.

Always state the calendar date and not a time period, i.e., 06/14/2022 and not “Payment Due in 14 Days”.

State the total amount owed

The final part of creating invoices for consulting services, and possibly the most important thing to include on an invoice, is the total amount due for your services. Again, this can be highlighted in bold or a separate font colour to make it more visible.

We can help

GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.