The service invoice, or an ‘invoice for services rendered’, is for any type of labor, consulting, or other work that is to be paid on a per hour ($/hour) or per job basis. The service invoice is mainly designed for an independent contractor and is sent to the client prior to or after the service has been rendered. Once the receivable has been paid, the client should be sent a receipt marking that a partial payment or the full balance has been paid.
Due to IRS Requirements, an invoice must be kept on record for three (3) years from the tax year date or two (2) years from which the tax was paid, whichever is longer.
Service Invoices – By Type
- Accounting Service
- Air Conditioning Service
- Bookkeeping Service
- Catering Service
- Cleaning Service
- Computer Repair Service
- Construction Service
- Courier Service
- Delivery Service
- Electrical Service
- Freelance Service
- Funeral Service
- Gardening Service
- HVAC Service
- Landscaping Service
- Legal Service
- Limousine Service
- Maid Service
- Professional Service
- Road Service
- Security Guard Service
- Taxi Service
- Towing Service
Table of Contents
- Service Invoices: By Type
- What is a Service Invoice?
- Popular Service Types
- Payment: Per Gig vs Hourly Rate ($/hr)
- Employee vs Independent Contractor
What is a Service Invoice?
A service invoice is calculated at the end of an individual providing labor in the form of consulting, advising, and providing actual labor. The invoice is to be served on the client as a demand for payment. The date when the total balance is due is commonly 15, 30 or 60 days for most businesses. If the client goes beyond the due date, late charges and/or interest may be applied per the service agreement. After payment is made, the invoice should be marked as paid and act as a receipt.
Popular Service Types
A service invoice can be used for any type of labor that is paid on an hourly basis or on a per job basis. The most common types of services, where the laborer is acting as an independent contractor are as follows:
- Real Estate
How are Independent Contractors paid?
There are three (3) ways to pay an independent contractor, per project, per gig, and per hour ($/hr).
When a contractor is paid on a per project basis payment is made at the completion of the work. This is often due to other factors such as equipment, employees, and other costs.
- For Example – This is common for construction projects as the contractor will need to include costs of building materials, products, and internal labor costs.
In other situations, the independent contractor is paid on a per task basis. This is common for jobs when it’s difficult to track the laborer’s efforts and base the pay on performance.
- For Example – A writer that gets paid on a per article basis due or a graphic designer being paid on a per image basis.
Per Hour ($/hr)
Being paid on a per hour basis due to their efforts. This is especially common when the employer is providing the equipment, space, and the tools necessary for the individual to complete with their own labor.
- For Example – A person that hires a bookkeeper to go over the finances of the company.
Employee vs Independent Contractor
The main difference is an employee gets certain guarantees, such as unemployment, medical insurance* (*in some cases), and time-off, whereas an independent contractor is “their own boss” and must withhold their own taxes from income.
- Works pre-set hours on a mandated schedule.
- May only be paid per hour ($/hr) or salary.
- Paid-Benefits from the employer.
- Not responsible for withholding income taxes.
Independent Contractor is
- Works on their own schedule.
- Can be paid per hour or per project/gig.
- No Benefits from the employer.
- Responsible for withholding income taxes.