# How to prepare an invoice when you are a self-contractor

Written by grace ferguson
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The typical independent contractor, or self-contractor, who works for himself and provides services to other businesses is classified as a sole trader. If you are self-employed, you are responsible for collecting payment for services rendered from the business that hired you to do the job. Some companies have their own invoice that contractors must fill out to get paid; others require contractors to make their invoice. If the latter applies, the process for preparing an invoice depends on the nature of your work. Still, some standard requirements apply.

Skill level:
Easy

## Instructions

1. 1

2. 2

Open the template and put "Invoice" in bold letters at the top of the page below the header. Type "Invoice Number" in bold and then create an invoice number; for example, 0001, for each invoice you make you should have a unique invoice number. Put "Invoice Date" in bold on the next line. Write in the current date after this.

3. 3

Create the following lines: "To:" which should be followed by the recipient company's name and address, indented. "Fees:" followed by the number of days you are charging for, then the "@" sign and then your daily rate. Eg., "25 days @ £500 per day.

4. 4

Create a column at the end of this line showing the total of the rate times the number of days. Put the "£" in front of the total.

5. 5

Create another line for "Expenses" the figure for these should be below the frres number and right justified. Create a "Sub-total" line on the next line. The subtotal figure should be the fees plus the expenses and should be right justified beneath the previous two figures.

6. 6

Create a heading "VAT @" followed by the applicable VAT rate for your charges. Calculate the VAT and type this below the subtotal. Add the VAT to the subtotal and type this figure in on the next line. All numbers should appear in a column and be preceded by the "£" sign.

7. 7

Make rows for Terms and Conditions, such as warranty information and the criteria for revisions, and Recipient Notes, such as to thank the receiver for his business. Also put your bank account details below the terms section.

8. 8

Draw two lines at the bottom of the invoice for you to sign and date. Type your full name under the respective line.

9. 9

Fill in the respective columns as they relate to each job you perform. At times, you might have to modify the invoice template so it suits different jobs. For example, if you charge an hourly rate for certain jobs, omit the Unit Cost heading and include columns for Hourly Rate and Hours Worked.

#### Tips and warnings

• Be specific when describing details of the work you performed to eliminate misunderstandings between you and the client. Ensure that your invoice matches what the client asked you to do and what you mutually agreed on.
• Save the blank template to your hard drive for later use.
• You can purchase standard invoices from a a stationer's.
• Accounting software comes with a built-in template for invoicing. For example, tax preparation software often comes with an invoicing program that the tax preparer can use to bill his clients.
• A stand-alone invoicing program allows you to create quotes, orders and invoices, and to e-mail or fax straight from the system.

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