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Key takeaways
- A service invoice bills for time, expertise or outcomes. It needs a clear description of the work, the period and the basis of the charge.
- Tie each invoice to a purchase order or statement of work. Buyers cannot pay service invoices they cannot match to an approval.
- Show hours and rates for time-based work, and milestones for fixed-fee work.
- Add the acceptance date where the contract requires sign-off. It speeds approval.
Free PDF and Excel: Service invoice template and description guide. Get it below
What makes a service invoice different
A service invoice is a bill for work performed, rather than goods delivered. It describes the service, the period it covers and how the charge was calculated.
The accounts payable team that receives it has no goods receipt to match against. The approver is the manager who used the service, and that person needs to recognise the work from the invoice. Write for the approver, not for the accountant.
A facilities contractor sends an invoice that reads "Services, May, 4,200". The approver has no idea which building or what work. The invoice sits in her inbox for three weeks and the contractor chases.
The contractor re-sends it with "Weekly cleaning, Building B, 1 to 31 May, 4 visits per week, rate per visit 262.50, 16 visits" and a PO number. It is approved the same day.
Three ways to charge
| Basis | How the invoice reads | Needs |
|---|---|---|
| Fixed fee | Description of the deliverable or milestone and the agreed amount | Reference to the SOW and the acceptance date |
| Time and materials | Hours by person or task, rate, expenses with receipts | Timesheets or a summary the buyer can check |
| Retainer | Monthly fee for the period, with any overage | Contract clause for the retainer and the cap |
Free PDF and Excel
Service invoice template and description guide
A service invoice layout with space for period, basis and acceptance, plus examples of good and poor descriptions.
- Service invoice layout
- Description writing guide
- Pre-send checklist
- Excel invoice with hours and rate
What goes on it
| Field | What goes in it | Why it matters |
|---|---|---|
| Service description | What was done, where, for whom. | The approver's first test. |
| Service period | Start and end dates. | Shows the invoice covers the right months. |
| Basis and rate | Fixed fee, hourly rate or retainer. | Lets the buyer verify the arithmetic. |
| PO or SOW reference | The approval document. | Required by most AP systems. |
| Expenses | Itemised, with receipts attached. | Buyers refuse bundled expenses. |
| Tax | Tax on services, where it applies, shown separately. | Rules differ by country and service type. |
| Payment terms | Due date and method. | Reduces chasing. |
For examples of full layouts see invoice example. If you bill in stages see progress billing, and if you bill every month see recurring invoice.
Mistakes that delay payment
- A description so short that the approver cannot place the work.
- No PO or SOW number.
- Expenses lumped into a single line.
- Billing for a period outside the contract.
- Hours with no breakdown.
- Sending to the project manager instead of accounts payable.
- Description names the work, place and period.
- PO or SOW reference is there.
- Basis and rate are shown.
- Expenses are itemised with receipts.
- Tax is separate.
- Sent to the accounts payable address.
Last checked: 19 October 2026. Tax treatment of services varies by country. Check local rules.
Frequently asked questions
What is a service invoice?
An invoice that bills for work performed, such as consulting, maintenance or labour, instead of goods.
How detailed should the description be?
Detailed enough that the person who approved the work recognises it without asking you.
Should I attach timesheets?
For time-based work, yes or offer them on request. Many buyers require them above a certain value.
When should a service invoice be issued?
When the work is complete, at each milestone, or at the end of each billing period, as the contract states.
Is tax charged on services?
It depends on your country and the type of service. Check with a local tax adviser.