How to write a general contractor invoice

Bill each stage against the contract price, give signed change orders and allowance differences their own lines, and finish with what has been paid and what is left.

Lines on a general contracting invoice

Line	Unit	How it’s counted
Contract draw	job	The stage finished, from the payment schedule
Change order	job	One line per signed change order, with its number
Allowance difference	job	The owner’s pick minus the allowance
Contractor labor	hr	Hours worked, on time-and-materials jobs
Materials	ea	Each item, such as 4×8 drywall sheets
Permit	ea	The fee, with the permit number
Dumpster	ea	Each container delivered and hauled away

A lump-sum job is billed as draws against the price, so hours and receipts stay off the invoice. On cost-plus or time-and-materials work, list costs by trade, keep the receipts ready, and show your fee or markup as a line of its own.

Progress draws against the contract price

Tie each draw to a stage the contract names, such as framing, rough-in inspection or drywall, so whether it’s due is a matter of fact. Every draw invoice carries the same running account: original price, signed change orders, revised total, billed before, this draw, and left to bill. As an illustration, a $60,000 contract with a $4,000 change order comes to $64,000; with $30,000 already billed, a $16,000 drywall draw leaves $18,000 to bill. Credit the deposit the way your contract says, and show it on every draw.

Some states tie progress billing to the work itself. For example:

• California: on a home improvement contract, apart from the down payment you may neither request nor accept a payment that exceeds the value of the work performed or material delivered, unless you have furnished one of the bonds, or the joint control, that the section names (B&P §7159.5).
• New York: where a home improvement contract has progress payments before substantial completion, it must schedule each in dollars and cents with the stage of completion that makes it due, and each must bear a reasonable relationship to the work, materials or expenses at that point; hourly or time-basis payments for work already done aren’t progress payments (GBL §771). It covers contracts over $500 made by contractors whose home improvement contracts total more than $1,500 in any 12 consecutive months (GBL §770).

Allowances and change orders on the bill

Once the owner picks an allowance item, bill the difference: as an illustration, a $2,000 tile allowance and $2,600 of tile chosen add $600, and a cheaper pick becomes a credit. Bill each signed change order on its own line with its number, and carry it into the revised total.

In Pennsylvania, on home improvement work priced over $500 at a private residence (new homes and emergency work aren’t included), no one may deviate from the plans or specifications in any material respect without a written change order, dated and signed by both the contractor and the owner, that states the price change for each deviation (73 P.S. §517.9).

The final invoice

Walk the punch list with the owner before the final invoice goes out, and if the contract holds back retainage, show it as due on the date or event the contract names. In Massachusetts, no final payment may be demanded on a residential contracting agreement over $1,000 until the contract is completed to both parties’ satisfaction (c.142A §2); residential contracting there is work such as repair, renovation or an addition on a pre-existing, owner-occupied building holding one to four dwelling units (c.142A §1).

Due dates and payment terms

Write each due date as a calendar date, counted from the invoice or the stage sign-off, as your contract says. When a construction lender funds the draws, learn its inspection and paperwork steps before the first one, because its schedule decides when money moves. Put the payment methods, the name checks are payable to, and any payment link on every invoice.

Sales tax on construction invoices

Whether a construction job carries sales tax depends on the state, and installed work can be treated differently from repairs. Separate labor and materials lines give you what you need either way. Show tax only where your state requires it, and read your state’s guide before the first draw goes out.

Liens: protecting your right to be paid

Some states attach lien rights to paperwork given along the way. Two examples, not a complete list:

California. A direct contractor, subcontractor, material supplier, equipment lessor, laborer or design professional that provides work authorized for a work of improvement has a lien right (Civ. Code §8400). A valid lien claim depends on preliminary notice to the owner, to the direct contractor the claimant works under and to any construction lender; but if you contract directly with the owner, you give it only to the construction lender, if there is one, and laborers need not give one (Civ. Code §8200). Your subcontractors and suppliers must give theirs within 20 days after first furnishing work; a later one covers only work from 20 days before it was served (Civ. Code §8204).

Unless you furnish the bonds or joint control that §7159.5 describes, a home improvement contract under §7159 must include the statute’s Mechanics Lien Warning, which tells the owner that unpaid subcontractors, suppliers and laborers may record liens even after the owner pays you in full (B&P §7159). CSLB advises owners to get a conditional release from possible lien claimants before each payment and an unconditional one after, says the direct contractor is required to get those signatures, and says the law lets the owner withhold the next payment until the previous payment’s unconditional releases arrive (CSLB). Collect your subs’ and suppliers’ releases before you bill the next draw.

Washington. Before starting a job to repair, alter or build four or fewer residential units, or accessory structures on that property, with a bid or contract price of $1,000 or more, or a commercial building priced at $1,000 or more but under $60,000, you must give the customer the “NOTICE TO CUSTOMER” disclosure statement in substantially the statute’s form (RCW 18.27.114). Among other things, it tells the customer they may withhold a contractually defined percentage as retainage. You can’t bring or maintain a lien claim under chapter 60.04 RCW on that contract unless you allege and prove you gave it, so keep the signed copy, which the law says you retain for at least three years. The rule doesn’t cover contractors contracting with other contractors.

Three mistakes that hold up a draw

1. Billing ahead of the work. A draw for an unfinished stage gives the owner, or the lender’s inspector, a reason to hold the whole payment.
2. Saving change orders for the end. Extras totted up on the final invoice, some never signed, turn the last payment into a negotiation.
3. A draw without its paperwork. When the owner or lender expects lien releases or a stage sign-off, a draw that arrives without them waits.