Guide to Invoicing for Hourly Work

Congratulations! You have completed your job successfully. Now what? It’s time, you focus on getting your payment on time, and for that invoicing is essential. Invoice is a vital accounting tool. There are various business enterprises and consulting services as well as freelancers who work on an hourly basis. To bill on an hourly basis you must track the working hours for that particular project. This could be weekly, bi-weekly or monthly, depending upon the contract that has been signed. The hourly invoice organizes your work according to billable hours before you proceed with payments.

To make your task easy, we have outlined a few steps to help you know how to invoice for hourly works. Scroll down and check out the article!

How to invoice for hourly work

You are offering great services to your clients and in turn, you expect to get paid for every hour you work. An accurate invoice can help organize every detail of your work by capturing the billable hours exactly. A well-designed invoice ensures your business credibility and holds your reputation. Here we will discuss how to invoice for hourly work.

Fix your freelancing hourly rate

Before proceeding directly to the hourly invoicing, it is essential to figure out the hourly rates that you are going to charge your clients. If you have a monthly budget of your business expenses then figure out the per hour rate accordingly. The amount generally fluctuates as this depends on specific parameters like your experience, skillset, industry type, etc. Once you have completed a project with positive feedback, you can build your portfolio with a specific hourly rate.

If you look around, generally the average hourly rate is $19/ hr. This rate may also vary between $11 to $28 as well. If you start with an approximate salary of $70,000 then the hourly rate would come around:

Suppose 50 hours worked per week. Therefore, 50 ×52 weeks/ year =2600 hours /year

$70,000/2600= $26.9 ≅ $27/hr. This could be your initial rate.

Setting an hourly rate would be much easier for those who have a long history in the business field.

Calculate your business expenses

Setting your hourly rates goes side by side with calculating the business expenses. Chalk out the expenses you will incur from your client. Besides your task, you may have additional expenditures for maintaining your business. These could include your overhead costs like office rent, phone bills, travel expenses, vehicle maintenance, fuel, electricity(in some cases), etc. Accumulate all the business-related expenses to complete your hourly rate.

Let’s find out what could be the new rate once you add up all your expenses.

Approximate monthly salary $70,000.

Cumulative expenses on overhead and business insurance= $40,000.

Therefore, $110,000/2600hrs=$42.3≅ $42/hr. This is your new rate after including all your business expenses.

Take the help of software to track your billable hours daily, weekly, or monthly for accurate calculation.

Give yourself a raise

Once you gain enough experience you can give yourself a hefty raise. Your portfolio with a long list of clients, your skills, and clients’ feedback would help you to demand a raise. Moreover, by now you would also have a well-designed website that will represent your business standard. Your expertise will get you more clients who would be ready to pay for your quality service and skills.

Do not compromise on your rates to hold your client. This would be unethical and would demotivate you at some point in time. Moreover, you may come across clients who would try to low-ball you and you may suffer immense loss. Be very specific while you fix your rates or demand a raise. You must have enough reason to give to your clients before you rate your services.

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Invoicing tips for hourly workers

Once done with setting an hourly rate and calculating additional business expenditure, you can move forward with an invoice for hours worked. First and foremost, convert the hourly rates into an invoice by multiplying the rate with total billable hours or hours worked. Tracking the hours worked is simple as you get several time-tracking software that monitors your billable hours.

Next, start with preparing the invoice.

  • Give a professional header. The header- ‘Hourly Invoice’ made in bold and readable font would make it prominent to the clients about its purpose.
  • Your contact information is something that you cannot miss. Mention your business name and address along with phone numbers. Contact details would help your client reach out to you in case of any emergency.
  • Undoubtedly, the client’s contact information is as vital as yours. Mention your client’s business name, address, postal code, and phone number.
  • Needless to say, your invoice cannot go without an invoice number. Assign a unique number so that it can be referred by you as well as your client whenever needed.
  • Give an itemized list of work done with the number of hours spent on each task. This gives your clients a better idea about hours worked how much you worked and how much you are charging for that.
  • Calculate the amount of dollars charged for each task and finally add the entire amount. Do add the tax amount if applicable.
  • Lastly, you must mention the payment method and timeline of payment. Keeping the payment method flexible is recommendable as that speeds up your payment procedure.
  • Add a note section below to add points like:
    • Late fee policy
    • Early payment discounts
    • Mention if you have received partial payment from clients

When is the right time to send an hourly invoice to your clients?

Send the invoice promptly as soon as you finish your project. This avoids the likelihood of any lame excuses from the client’s end. Delay in sending the invoice would only end up in delayed payments So, it is important that you send your invoices immediately with a clear mention about the time frame, payment method, and other payment policies, as discussed earlier. Do keep the invoice copy for tax purposes.

How to number the invoice?

We have already mentioned earlier that your invoice for hours worked should be numbered as it acts as an identifier. But are you confused as to how to do that? It’s as easy as numbering any other documents like an attendance register or numbering a product list. The numbers assigned allow the clients and tax authorities to locate the invoice for future reference. Well, there mainly four types of invoice numbering systems and they are:

Sequential numbering:

This system of invoice numbering is preferable, and it makes it easy for you to remember. Assigning random numbers or signs may confuse you, and it may end up with duplicate numbers for two invoices.


This involves letters, numbers, and special characters. This is also easy to track and avoids confusion.

Chronological numbering:

This numbering system involves a unique way of remembering the client’s name and helps in racking the invoice. You can use date and customer ID or the date(date of issue) and customer name to number your invoice.

Combination type:

This is similar to the Chronological numbering system. The only difference is it includes the project name and number or the customer name and number to assign numbers to invoices.

How do freelancers make invoices?

Hourly invoice is beneficial for clients, as it gives a clear idea about the cost of a freelance job. An hourly invoice of a freelancer is much similar to other commercial invoices. So, let’s understand how they make a freelance invoice.

  • The amount is calculated on the basis of hours worked.
  • The freelancers include the billable hours besides, the detailed description of services provided.
  • They need to mention the hourly rate and the total amount for the project or the part of the project so that the clients understand what they need to pay.
  • Next, the freelancer also needs to clearly state the payment method. Make sure you also include the additional fee (if any) for a specific payment mode.
  • A freelancer can opt for online invoicing software to simplify the process. This customizes your invoicing needs and fosters healthy business relationships.
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Bottom line!

Whether freelance invoices or any other hourly invoices, you get various invoice templates online that ease up your job. With Billbooks you can get your invoices ready with just a click. You can opt for customized templates or implement your requirements as well. Invoicing is no more a tedious task and with Billbooks enjoy hassle-free invoicing just in a minute.