What to put on an invoice for a trades business

A complete service invoice carries your business name and contact details, your license number where your state requires it, the customer’s name and the job address, a unique invoice number, the date issued and the date of service, each line item with its quantity and price, the subtotal, sales tax if your state taxes the work, any deposit or payment already received, the balance due, the due date, and how to pay. There’s no single federal list in the US, but the IRS expects you to keep invoices as records of your income, and states add their own rules.

What should every invoice include?

1. Your business name, address, phone and email. The name should match what the customer hired and what your bank account says.
2. Your license number, where your state or trade requires it (see below), and anywhere it reassures the customer.
3. The customer’s name and billing address, plus the job address if it’s different.
4. An invoice number. Unique and in order, so you and your accountant can find it and spot a gap.
5. The date issued and the date of service.
6. Line items: what you did and what you supplied, each with a quantity and price. “Replace 40 gal water heater” beats “Labor and materials.”
7. Subtotal, tax and total. Tax on its own line, at the rate that applies.
8. Payments already received: the deposit or any progress payment, so the customer sees what’s left.
9. Balance due and the due date, or the terms (due on receipt, net 15, net 30).
10. How to pay: a pay link, bank transfer details, or who to make the check out to.
11. Your terms: warranty, late fee policy if you have one, and anything the estimate promised.

What might your state require?

Two common places states set rules:

• License numbers. California’s Contractors State License Board says licensed contractors must include their license number in all construction contracts, subcontracts, calls for bid and all forms of advertising. Your state’s licensing board will say what yours requires.
• Sales tax on services. Some states tax some services. In Texas, for example, labor to repair or remodel residential property isn’t taxable, but the charge for repairing or remodeling nonresidential property is, labor included. Your state’s revenue department publishes its rules by trade.

If you charge a late fee, state it before the work starts, on the estimate or agreement, and check your state’s limits first.

What does the IRS expect you to keep?

The IRS says to keep supporting documents that show the amounts and sources of your gross receipts, and lists invoices among them, alongside deposit records and receipt books. Its general rule is to keep records for three years, longer in some cases: six years if you left out income worth more than 25 percent of the gross income shown on your return, seven for a bad debt deduction, and at least four for employment tax records.

How do you make complete invoices the default?

Set the fixed parts up once so they’re on every invoice:

• In FieldFlow, your logo, colors and license number go on every estimate and invoice.
• Saved line items keep descriptions and prices the same on every job.
• A tax rate on the invoice puts the tax on its own line.
• Payment terms: due on receipt, net 15, net 30 or net 60, with the due date shown.
• Numbering: issuing the invoice gives it its number and locks it, so a sent invoice can’t quietly change.
• Deposits: a paid deposit carries onto the final invoice, so the balance is right.
• Terms: save your terms text (warranty, payment terms) once and pick it for each document.
• The pay link: once Stripe is connected, the customer pays by card or bank transfer from the invoice, and it’s marked paid.

When you need records for your accountant, FieldFlow’s Download All My Data gives you a PDF of every issued document plus spreadsheets of every record.

The short version

Name, license number, customer and job address, a number, dates, clear line items, tax on its own line, payments received, balance, due date and how to pay; then keep it for at least three years. FieldFlow puts the fixed parts on every invoice at $19/month for the whole business, with a 90-day free trial. This is general information, not legal or tax advice; check your state’s rules for your trade.

Questions owners ask

Is there a legal list of what an invoice must include in the US?

There's no single federal list for an invoice between a business and its customer. The IRS expects you to keep supporting documents, such as invoices, that show the amounts and sources of your income, and your state may require specific items, such as a license number on contracts or sales tax on certain services. Check your state's licensing board and revenue department.

Does my license number have to be on my invoice?

It depends on your state and trade. California, for example, requires licensed contractors to put their license number on construction contracts, subcontracts, calls for bid and all advertising. Even where it isn't required, it tells the customer you're licensed.

How long should I keep invoices?

The IRS's general rule is three years, with longer periods in some cases: six years if you left out income worth more than 25 percent of the gross income shown on your return, seven for a bad debt deduction, and at least four for employment tax records. Your accountant may advise keeping them longer.

Should sales tax be a separate line on the invoice?

Where you charge it, yes: show it on its own line so the customer and your books can see it. Whether a service is taxable depends on the state. In Texas, for example, labor to repair residential property isn't taxable, while repairing nonresidential property is.