Most companies and businesses hire contractors to handle particular tasks in their establishments. Since contractors aren’t company employees and will not get automatic payments via the company’s payroll system, they have to provide invoices to claim payments for their services. In a majority of cases, the contractor receives an advance payment before starting the project, followed by several installments based on the contract. For example, a contractor can get a 20% advance payment, and the rest 80% is spread in several installments. Once the contractor is paid, the transaction is recorded in a receipt as evidence the payment was made.
Contractor Invoice VS Contractor Receipt
Contractor invoice: A contractor invoice is a document that records the services the contractor offers to the client. This is the document the contractor will use to bill the company or business they have offered their services. The contractor invoice includes vital information based on the contract between the contractor and their client. This information may consist of an itemized list of material used for the project or number of hours worked and the respective fees. The document may also include a list of services rendered alongside the amount of money charged for the services. The contractor invoice is the document the individual issues to their client requesting for payment. This is usually done after services are rendered or as agreed in the contract. The invoice may also indicate the preferred mode of payment.
Contractor receipts: Once a contractor issues an invoice to their clients, its scrutinized to confirm it’s as agreed in the contract before approval. The client writes receipts indicating the list of the services provided alongside the payments. This receipt acts as proof that the contractor has received payment for their services from their client. The contractor receipt contains essential details about the contractor and the client, such as the company name, a list of services offered, prices, and name of the client, among others. This receipt is issued after the contractor has been paid for their services.
Contractor receipt templates
What does a contractor receipt include?
Although the contents of a contractor receipt may vary from one company to another, a standard contractor receipt should include the following:
- Company’s name & address
- Name of the contractor
- A description of the services
- Total amount paid
- Signature & name of the contractor
- Signature & name of the client
- Benefits of contractor receipts
A contractor receipt is issued every time a contractor receives payment for their services. The receipt contains an itemized list of the services rendered and the amount paid for these services; it also acts as proof of payment. The client also keeps a copy of the receipt and can use the document for accounting purposes to know who their money was spent over a specific period. The receipts will also prove a transaction occurred between the contractor and their client.