Last updated November 6, 2026
General information, not tax or legal advice. The rules depend on your country and your situation, so check anything with a tax or legal consequence with your accountant.
To invoice professional services, bill to the terms in your engagement letter and describe the work so the client can approve it without calling you: the period covered, what was done, hours and rate or the fixed fee, expenses and disbursements on their own lines, then VAT, the total and the due date.
A client can count a delivered pallet. Nobody can count advice, so the invoice has to show it. That's what separates a bill from a consultancy, law firm, accountant or agency from an ordinary one. The general steps are in how to invoice clients.
How should you invoice each fee arrangement?
You should invoice each fee arrangement so the line repeats what the engagement letter promised, in the same words if you can.
| Fee basis | What the line says | When to send it | Read next |
|---|---|---|---|
| Hourly | Who or which role, the period, hours, rate | Monthly, or at agreed stages | Hours into an invoice |
| Fixed fee | The deliverable, and a reference to the agreed fee | At stages set in the engagement letter | Lump sum vs hourly |
| Retainer | The month covered and the agreed scope | Same date each month, often in advance | Monthly retainer |
| Stage or milestone | Stage name, amount, running total | When the stage is reached | Progress billing |
| Capped hourly | As hourly, plus the cap used and left | Monthly | Hourly vs retainer |
If you haven't written the fee basis down, fix that before you fix the invoice. The fees section of an engagement letter shows what to include.
How much detail should a professional services invoice include?
A professional services invoice needs enough detail to identify the service and its extent, which is also what the law asks. Article 226(6) of the EU VAT Directive requires "the extent and nature of the services rendered". HMRC's VAT guide asks for a description sufficient to identify them, and says a service's unit price might be an hourly rate or a price for a standard service.
| Too vague | Clear enough |
|---|---|
| Consulting services | Supply-chain review, phase 2: site visits and report, 2 to 27 March 2026 |
| Legal work | Lease renewal, 12 Mill Road: negotiation and drafting, 12.5 hours at €140 |
| Monthly fee | Bookkeeping and VAT return preparation, March 2026, fixed monthly fee |
Keep confidentiality in mind. An invoice passes through an accounts team who have no need to know about a dismissal or a dispute. For sensitive work, keep the line neutral ("Employment advice, March 2026, 6 hours") and send the detailed narrative to your contact separately.
A worked example: fees, hours, an expense and a disbursement
Here's an invented example: a small consultancy bills a client for March, with 20% VAT for illustration.
| Line | Qty | Rate | Net | VAT 20% |
|---|---|---|---|---|
| Phase 1 discovery, fixed fee per engagement letter of 3 March | 1 | €3,000.00 | €3,000.00 | €600.00 |
| Senior consultant, 2 to 27 March | 12.5 hours | €140.00 | €1,750.00 | €350.00 |
| Consultant, 2 to 27 March | 20 hours | €95.00 | €1,900.00 | €380.00 |
| Train to client site, recharged at cost | 1 | €85.00 | €85.00 | €17.00 |
| Subtotal | €6,735.00 | €1,347.00 | ||
| Land registry search fee paid on the client's behalf (disbursement) | 1 | €120.00 | €120.00 | None |
| Total due | €8,202.00 |
The total is €6,735 plus €1,347 VAT, plus the €120 disbursement.
The last two lines are where firms go wrong. Your train fare is a cost of doing your own job, so it's part of your price and takes VAT, whatever you call it on the invoice. HMRC says its conditions usually stop an adviser's own travel, phone and postage counting as disbursements (paragraph 25.1 of the guide above, and its guide to costs and disbursements).
A true disbursement is different. You paid as the client's agent, the client received and used what was bought, and you pass on the exact amount. The EU basis is Article 79(c) of the VAT Directive, which also requires proof of the actual amount and bars you from deducting any VAT charged on it. VAT on reimbursable expenses and disbursements goes through the tests.
How often should you bill for professional services?
Monthly is the safest default for professional services billed by time, because a short bill for recent work gets read and paid, and a five-month bill gets negotiated. It also means a problem surfaces after one month's fees rather than five.
Whichever rhythm you choose, state the period on every invoice. Article 226(7) asks for the date of supply where it differs from the issue date, and "1 to 31 March 2026" answers that and the client's first question together.
Work you've done and not yet billed is money you're lending. A WIP report shows how much of it there is. If you take money on account before starting, see deposit and final payment invoices for how to bill it, and if you hold client money, your regulator's rules come first.
How do you show a discount or written-down hours?
Show written-down hours as a visible discount rather than quietly billing fewer of them, because the client then sees both the work and the concession. Article 226(8) asks for discounts to be shown anyway if they aren't already in the unit price.
Here's an invented example. A consultant worked 40 hours at €95 and decides to charge for 34.
| Line | Amount |
|---|---|
| Consultant, March, 40 hours at €95.00 | €3,800.00 |
| Discount, 15%, agreed with J. Smith on 2 April | −€570.00 |
| Net | €3,230.00 |
That €3,230 is exactly 34 hours at €95, and next month's budget conversation starts from the real number. Our guide to write-downs and write-offs covers the difference between the two.
How do you stop a bill surprising the client?
You stop a bill surprising the client by saying what's in it before they open it. A three-line cover note does most of the work, and invoice email templates has more versions:
Attached is invoice INV-2026-0088 for March: €8,202.00, due 14 April. It covers phase 1 of the review at the agreed fixed fee and 32.5 hours of follow-up work at the agreed rates, within the 40-hour estimate we discussed. Hours by date are in the attached summary.
If a bill is going to exceed an estimate, phone first. A client who hears about an overrun from you tends to discuss it. A client who finds it on an invoice tends to dispute it.
Invoicing professional services in ERPFlow
ERPFlow has no timer and no timesheets. Hourly work is billed by entering a rate and a quantity on the invoice, usually from a service that holds the rate and the tax. Time tracking, including converting tracked time into invoices, is coming soon.
For now, keep your time record where you keep it today and type the totals in. A project can link to a customer and to its quotes and invoices, and each card has a time spent field typed as hours and minutes, which adds up per project and per customer. That total doesn't become invoice lines, and there's no report per person.
The invoice in the example above works as it stands. Each line has its own quantity, price, optional discount and tax rate, so fee lines can carry VAT while a disbursement line carries none. A time summary can go on the invoice's Attachments card, though the email carries only the invoice PDF, so you send the summary yourself. Retainers can run as recurring invoices, which bill the client on schedule and never collect the money.
Projects have no rates, budgets, costing or profitability, and ERPFlow has no WIP report. Expenses aren't linked to customers or jobs, so a recharge is a line you type on the invoice.