Construction Invoice Template: Free Download & Complete Guide

Why Construction Invoicing is Different

Construction invoicing requires special attention to detail due to progress payments, material costs, labor tracking, and lien rights. A proper construction invoice protects your payment rights and maintains clear project documentation.

Essential Elements of a Construction Invoice

• Project name and address: Specific job site location
• Contract number: Reference to original agreement
• Progress billing percentage: How much of project is complete
• Labor costs: Itemized by trade or worker
• Materials: Detailed list with quantities and costs
• Equipment rental: If applicable
• Change orders: Any approved modifications
• Retainage: Amount withheld (typically 5-10%)
• Previous payments: Running total of what's been paid
• Lien waiver information: Conditional or unconditional

Types of Construction Invoices

Progress Invoice (AIA G702/G703)

Most common for larger projects. Shows percentage complete and requests payment for work done to date.

Example:

• Original contract amount: $500,000
• Work completed to date: 45% ($225,000)
• Less retainage (10%): -$22,500
• Previous payments: -$180,000
• Amount due this invoice: $22,500

Time and Materials (T&M) Invoice

Charges actual costs plus markup. Common for repair work and smaller jobs.

Example:

• Labor: 40 hours @ $85/hr = $3,400
• Materials: Lumber, concrete, etc. = $1,200
• Equipment rental: $300
• Total: $4,900

Fixed Price/Lump Sum Invoice

Single price for entire project, billed at milestones or completion.

Unit Price Invoice

Charges per unit of work completed (e.g., per square foot, per linear foot).

Sample Construction Invoice Template

[YOUR COMPANY NAME]
[Address, Phone, Email]
License #: [Your contractor license number]

INVOICE #: 2025-001
DATE: January 15, 2025
DUE DATE: February 14, 2025

BILL TO:
[Client Name]
[Client Address]

PROJECT: Kitchen Remodel
JOB SITE: 123 Main St, Anytown, ST 12345
CONTRACT #: KR-2024-089
CONTRACT DATE: December 1, 2024

WORK PERFORMED:

Description	Quantity	Rate	Amount
Demolition	1	$2,500	$2,500
Framing labor	32 hrs	$75/hr	$2,400
Electrical rough-in	1	$3,500	$3,500
Plumbing rough-in	1	$2,800	$2,800

MATERIALS:

Lumber (2x4, 2x6)	-	-	$850
Electrical supplies	-	-	$425
Plumbing supplies	-	-	$675

SUBTOTAL: $13,150
RETAINAGE (10%): -$1,315
TOTAL THIS INVOICE: $11,835

CONTRACT SUMMARY:
Original contract amount: $45,000
Change orders: $0
Revised contract amount: $45,000
Previous payments: $0
This payment: $11,835
Retainage held: $1,315
Balance to finish: $31,850

Understanding Retainage

Retainage is money withheld from each payment (typically 5-10%) until project completion. It protects the owner and ensures contractor returns to complete punch list items.

How to Show Retainage on Invoices

• Calculate full amount earned
• Subtract retainage percentage
• Show both amounts clearly
• Track cumulative retainage
• Request retainage release at project completion

Progress Billing Best Practices

1. Define milestones clearly: In original contract
2. Document progress: Photos, daily logs, inspections
3. Invoice promptly: As soon as milestone reached
4. Include backup: Receipts for materials, time sheets
5. Track change orders: Get written approval before work
6. Maintain running totals: Show contract balance clearly

Change Orders on Invoices

Always document change orders separately:

• Change order number
• Date approved
• Description of change
• Additional cost
• Client signature (on change order form)

Lien Waivers and Construction Invoices

Many states require lien waivers with payment. Two types:

Conditional Lien Waiver

"Upon receipt of payment, I waive lien rights for this amount."

Use when submitting invoice (before payment received).

Unconditional Lien Waiver

"I have been paid and waive all lien rights for this amount."

Provide after payment clears.

Common Construction Invoice Mistakes

• Vague descriptions: "Labor" isn't specific enough
• Missing backup documentation: Keep receipts and time sheets
• Incorrect retainage calculations: Double-check math
• Not tracking change orders: Leads to disputes
• Poor running total tracking: Confuses clients
• Missing lien waiver info: Delays payment

Payment Terms for Construction

Typical construction payment terms:

• Net 30: Most common for commercial projects
• Net 15: Residential projects
• Progress payments: Within 7-14 days of invoice
• Final payment: Upon completion and inspection

Software for Construction Invoicing

While InvoiceKit works great for construction invoicing, specialized construction software includes:

• Procore: Enterprise-level project management
• CoConstruct: Custom home builders
• Buildertrend: Residential construction
• Sage 100 Contractor: Accounting-focused

Legal Requirements by State

Check your state's requirements for:

• Contractor license number on invoices
• Lien waiver language
• Retainage limits and rules
• Prompt payment laws
• Preliminary notice requirements

Conclusion

Construction invoicing requires attention to detail and industry-specific knowledge. Use proper templates, track progress carefully, and always document change orders. Create professional construction invoices with InvoiceKit today!