Billing by the hour sounds simple until the client's finance team asks what "Development work, 37.5 hrs" actually covered. An hourly invoice lives or dies on its time detail. When each block of hours carries a date, a task and a short description, approval is a formality. When it doesn't, the invoice sits in a queue while someone emails you for a breakdown you should have sent the first time.
This template is built around that breakdown. It puts the billing period, the rate and the rounding rule at the top, then a dated time log, then the totals, so the person approving it can check the math in under a minute.
TL;DR
The hourly invoice template lists dated time entries with task descriptions, the hourly rate, the rounding increment, the billing period, totals with a [TAX RATE]% placeholder, and payment terms. Send it weekly or every two weeks on active projects. The single most useful practice is stating your rounding increment, such as 0.25 hours, on the invoice so nobody argues about minutes later.
What's inside
- Header and bill-to — your business details and the client's legal billing entity.
- Billing period and rate block — period start and end, hourly rate, rounding increment, and any rate differences for after-hours or rush work.
- Time log table — date, task or ticket reference, description, hours, rate, amount.
- Summary by task — optional roll-up so a manager can see hours per workstream without reading every row.
- Expenses — pass-through costs at cost or with an agreed markup.
- Totals — subtotal, tax placeholder, previously invoiced amount, total due.
- Payment terms and methods — due date, accepted methods, dispute window.
When to use it
Use it any time the contract says you bill for time: open-ended development work, support hours, advisory work, editing and revisions charged outside a fixed fee, or overflow work on top of a retainer. It also suits the first project with a new client when the scope is still too fuzzy to price.
Do not use it for fixed-fee work just because you tracked time internally. If the client agreed a project price, send a freelance invoice or a milestone invoice instead; showing hours on fixed-fee work invites the client to renegotiate based on how fast you were. For ongoing monthly hour blocks paid in advance, the retainer invoice is the better fit.
Writing time entries clients approve without questions
The description column does most of the work. A few habits make a big difference:
- Name the outcome, not the activity. "Fixed checkout tax calculation for EU addresses (ticket 214)" beats "Bug fixing."
- Keep entries between 0.25 and 4 hours. An eight-hour entry that says "Development" reads like a guess. Break long days into the two or three things you actually did.
- Reference their system. If the client uses ticket numbers, sprint names or campaign codes, use them. It lets their project manager match your hours to their own records.
- Separate meetings. Clients are often surprised by how much call time adds up. Listing calls as their own lines makes that visible without you having to argue about it.
- Flag rate changes. If weekend or rush work carries a higher rate, put it on separate rows with the rate shown, not blended into an average.
Rounding, minimums and caps
State three numbers on every hourly invoice: the rounding increment, any minimum charge, and any cap. A common setup is 15-minute rounding, a one-hour minimum for ad hoc requests, and a monthly cap agreed in the contract that you will not exceed without written approval.
The cap matters more than freelancers expect. If the client approved "up to 40 hours this month" and you are at 34, tell them before you cross the line, not on the invoice. An invoice that exceeds an agreed cap is the most common reason hourly invoices get short-paid. The billable vs non-billable hours post covers how to decide what goes on the invoice at all.
Customize it in your COLO workspace
In COLO you can run a start/stop timer or add manual time entries against tasks, mark tasks billable or non-billable, and then create an invoice from tracked time, so the time log on the invoice comes straight from your timesheet instead of being retyped. Invoices support line items, tax rates, discounts and partial payments, and you can email the invoice or download a PDF. See Invoicing and Payments.
If you set a project budget, COLO warns you in-app at 80% and stops billable timers at 100% with options to request a contract update, continue as non-billable or pause, which is a practical way to respect an hours cap. Details are on the Project Budgets page. Clients can pay by card through Stripe or by PayPal from the client portal.
Common mistakes
- One line for the whole period. "Consulting — March, 22 hrs" forces the client to ask for detail, which delays payment by at least one email round trip.
- No rounding rule. Without it, a client who sees 1.25 hours for a "quick call" assumes you padded it.
- Surprise overruns. Crossing an agreed cap without warning turns a routine invoice into a negotiation.
- Billing internal learning time. Hours spent learning a tool you chose are usually your cost, not theirs, unless agreed.
- Long billing periods. A quarter's worth of hours on one invoice is hard to verify and easy to dispute.
FAQ
Q: How should I round time on an hourly invoice?
Pick one increment and state it on the invoice. Six-minute (0.1 hour) and 15-minute increments are the most common. Whatever you choose, round consistently and never round every entry up by a full hour.
Q: Should I list every time entry or just a total?
List entries grouped by day or task with a one-line description. Clients rarely question a dated, described entry; they question a single line that says 42 hours.
Q: How often should I send an hourly invoice?
Weekly or every two weeks for active projects, monthly for light ongoing work. Short billing periods keep each invoice small and surface disagreements about hours while everyone still remembers the work.
Q: Do I show non-billable hours?
Showing a few non-billable entries at zero cost can build goodwill, because the client sees work you absorbed. Keep it brief so the invoice stays easy to approve.
Q: What if the client disputes the hours?
Send the underlying timesheet for the disputed period and ask which entries are in question. Undisputed lines stay payable on the original due date, which the template states.
Related
- Timesheet Template — the log behind the invoice.
- Hourly vs fixed fee vs retainer pricing — when hourly billing is the right model.