IT Contractor Invoice Template: Getting Paid for Tech Work
Tech contractors face unique invoicing challenges — PO numbers, SOW references, IR35, and corporate AP departments that reject invoices on a technicality. Here's how to get paid without the drama.
IT Contractor Billing Nuances
Time & Materials vs Fixed Price vs Milestone
How you invoice depends entirely on how the contract is structured:
| Contract Type | Invoice When | What to Include |
|---|---|---|
| Time & Materials | Weekly or monthly | Timesheet, rate, hours per task |
| Fixed Price | On completion or milestones | Deliverable description, SOW reference |
| Milestone | On milestone sign-off | Milestone name, acceptance date, amount |
| Retainer | Monthly in advance | Month, retainer amount, hours included |
Day Rates vs Hourly Rates
Most senior IT contractors bill day rates (typically £300–£800/day in the UK, €400–€1,000/day in NL/DE). Day rates simplify invoicing — you count days, not hours. For part-days or overtime, hourly rates give more flexibility.
💡 Pro tip:State in your contract whether travel days count as full days, half days, or aren't billed. This prevents disputes on your invoice.
Retainer Contracts
Retainers are the holy grail for IT contractors — predictable monthly income. Invoice at the start of each month. If hours are tracked, send a utilization report showing hours used vs included.
Statement of Work (SOW) on Invoices
Corporate clients almost always require a SOW before work begins. Your invoice must reference the SOW number. Without it, the accounts payable (AP) team cannot match your invoice to an approved purchase and will reject or delay payment.
Example invoice line:
Software development services per SOW #2026-047
Period: 1–31 May 2026 | 18 days @ £550/day
PO Numbers — The Corporate Gotcha
Large companies don't pay invoices without a Purchase Order number. Without a PO number on your invoice, it gets stuck in approval limbo for weeks.
Always ask before starting work:“Can you provide a PO number for this engagement?” If they say they'll raise one later — don't start work until it arrives.
What IT Contractors Must Include on Invoices
IR35 and Invoicing (UK Contractors)
🇬🇧 IR35 Determines How You Invoice
Outside IR35
Invoice directly from your Ltd company. Include your company registration number and VAT number. You receive the gross amount and handle your own tax.
Inside IR35
Invoice through an umbrella company or the client deducts PAYE at source. The umbrella company invoices the client and pays you net of tax/NI.
Note: Since April 2021, medium/large private companies determine your IR35 status. Always get a written Status Determination Statement (SDS) before starting.
Dealing with Slow-Paying Corporate Clients
45–60 day payment terms are standard in the tech sector. This creates serious cash flow problems for contractors. Here's how to fight back:
- Request Net 14 or Net 30 for contracts under £10K — negotiate before signing
- For longer engagements, negotiate monthly invoicing (not quarterly)
- Offer a small early payment discount (1–2%) to incentivize faster payment
- Get agreement on the invoicing process in writing before day one
Chaser sends escalating reminders at day 3, 7, 14, and 30 after the due date. Automated reminders remove the awkwardness — the reminder comes from “the system,” not from you personally, which actually works better with corporate AP teams.
Stat: IT contractors using automated reminders get paid an average of 18 days faster than those who chase manually.
Free IT Contractor Invoice Template →
Pre-configured for IT contractors — PO number, SOW reference, day rate, VAT, bank details, and automated chasing.
Use Free TemplateFrequently Asked Questions
What is a PO number and do I need one on my invoice?
A Purchase Order (PO) number is a reference generated by your client's procurement system to authorize spending. For corporate clients, it's usually mandatory — invoices without a PO number get rejected or stuck in approval. Always ask for the PO number before submitting an invoice.
Do IT contractors need to be VAT registered?
In the UK you must register for VAT when turnover exceeds £90,000/year. In the EU (NL/DE), register when you exceed the local threshold (€20K in the Netherlands under KOR). Most full-time contractors exceed these thresholds quickly.
How should I invoice for a day that included travel?
Refer to your contract. Most contracts specify whether travel days are billed at full day, half day, or not at all. If your contract doesn't specify, raise it before the first travel day to avoid disputes.
Can I charge late payment interest on a corporate client?
Yes. Under the EU Late Payment Directive (B2B), you're entitled to charge statutory interest from day one of late payment. In the UK, the Late Payment of Commercial Debts Act 1998 allows 8% + Bank of England base rate.
How do I handle invoicing for a project that overran scope?
Issue a change order (CO) first, get it signed, then invoice for the additional amount referencing the CO number. Never surprise a client with a higher-than-agreed invoice.
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