How to Invoice as a Contractor: Stop Chasing Payments and Protect Your Cash Flow

Krib Team · 2026-03-21

A complete guide to contractor invoicing — what to include, how to send, how to handle late payments, and the free tools that automate the process. Includes state lien deadlines and tips to get paid faster.

How much should I ask for a deposit before starting a job?

The industry standard is 25% to 50% of the total project cost upfront. This secures the client's commitment and covers out-of-pocket material costs so you are not financing the project yourself.

What are standard payment terms for contractors?

For residential service calls, "Due upon receipt" is standard. For larger remodeling or commercial jobs, milestone progress payments or Net-15 to Net-30 are the most common terms.

Can I charge a late fee on unpaid invoices?

Yes. A monthly late fee of 1.5% to 2% is standard and legal in most states. However, this must be clearly outlined in your signed estimate or contract and printed on the invoice itself to be enforceable.

Do I need to separate parts and labor on the invoice?

Yes. Itemizing materials and labor reduces disputes by showing exactly what the client is paying for. It also simplifies tax reporting, since materials and labor are often taxed differently depending on your jurisdiction.

What is the best free invoicing app for contractors?

Several free options exist for contractors. Krib (mykrib.app) offers invoicing, scheduling, a customer portal, and payment processing at no monthly cost, with full English and Spanish support. Wave is another free option for invoicing only but lacks field service features like job scheduling and dispatch.

What is a mechanics lien and when should I file one?

A mechanics lien is a legal claim against a property when you have not been paid for work performed. Filing deadlines vary by state — from 60 days to 8 months after your last day of work. Start the process when a client is 60+ days past due and has not responded to formal demand letters. Consult a construction attorney in your state for specific requirements.

Sources

  1. Rabbet/Procore 2024 Construction Payments Report — 82% payment delays, 95% GC float costs
  2. Intuit QuickBooks 2025 Small Business Late Payments Report — $17,500 avg outstanding invoices
  3. PYMNTS Intelligence 2024 — 64% delayed payments, 43-day avg wait
  4. Gateway Commercial Finance — $39,406 annual cost of late payments
  5. Gartner Invoice Processing Benchmarks — $12-$30 manual vs $1-$4 automated per invoice
  6. Levelset Mechanics Lien Guides by State — Lien deadlines and notice requirements