For contractors and small construction businesses, staying on top of billing is just as important as staying on top of the job site. A clear, detailed invoice for construction work not only helps you get paid faster, it also protects your business from disputes and keeps projects moving smoothly.
In this post, we’ll walk through the key parts of a construction invoice, compare it with a standard invoice, and touch on when more formal payment applications—like the AIA G702 and G703—come into play.
The Essential Parts of a Construction Invoice
Unlike a simple one-line invoice for services, a construction invoice has multiple sections that reflect the unique nature of project-based work. Here’s what to include:
1. Header and Business Information
Start with your company name, logo, contact information, and any tax or license numbers required.
2. Client Information
List the name, company, and billing details of the client or project owner.
3. Project Details
Identify the project with a job name, project number, site address, or contract reference.
4. Invoice Number and Date
Assign a unique invoice number and include the issue date for easy tracking.
5. Description of Work
Provide an itemized list of what was completed:
- Labor (tasks, hours, or milestones)
- Materials (types, quantities, and costs)
- Equipment or subcontractor charges
6. Retainage
If a portion of payment is withheld until project completion, show the retainage amount separately.
7. Totals and Taxes
Calculate the subtotal, subtract retainage, add any taxes or fees, and clearly state the final balance due.
8. Payment Terms
Include the due date, accepted payment methods, and any late payment policies.
A construction invoice with this level of detail shows professionalism and makes it easier for clients to approve payments without delays.
Standard Invoice vs. Construction Invoice
At first glance, an invoice is just a request for payment—but in construction, the details matter.
- Standard invoice: Often used in retail, freelancing, or small service jobs. Typically includes just a description, rate, quantity, and total.
- Construction invoice: Designed for project-based work. It breaks down labor, materials, subcontractors, retainage, and often ties directly to a contract.
In short, a standard invoice says “here’s what you owe,” while a construction invoice says “here’s the work completed so far, what’s being held back, and what’s due now.”
When Invoices Become Payment Applications
On larger commercial jobs, especially those involving architects or public contracts, a simple invoice isn’t enough. Contractors may be required to submit a payment application, most commonly using the AIA G702 and G703 forms.
- AIA G702 is the summary sheet that shows the contract value, payments to date, retainage, and the current amount due.
- AIA G703 (the continuation sheet) provides the detail—breaking the job into a schedule of values and showing progress on each line item.
Together, these create a standardized “construction-style” billing method that ensures transparency and consistency. They differ from a basic invoice for contractors because they require certification and align closely with contract terms.
👉 Want to dive deeper into payment applications? Check out our full guide on construction payment applications.
Tips for Professional Contractor Invoices
- Use templates or software to keep your invoices consistent and professional.
- Go digital whenever possible—emailing invoices or using software speeds up approvals.
- Be clear and specific with descriptions of work; avoid vague terms like “labor” or “materials.”
- Double-check your math before sending. Even small errors can delay payment.
Final Thoughts
A well-prepared invoice for contractors does more than request money—it builds trust, reduces disputes, and helps you get paid on time. For smaller projects, a detailed construction invoice is often all you need. For larger jobs, especially when progress billing is required, payment applications like the AIA G702 and G703 are the industry standard.
By understanding the anatomy of a construction invoice and knowing when to step up to a payment application, you’ll set your business up for healthier cash flow and stronger client relationships.