Guide to Hourly Invoicing (Rates, Time Records, and Trust)

An hourly invoice charges a client for the time you've worked, at the rate you agreed. Each dated entry names the task and gives the hours in decimal form and the rate; the entries are totaled for the period, and the invoice ends with the balance owed and when it's due. Before you bill by the hour, agree with the client in advance on your rates, how you round time and what counts as billable, and keep time records specific enough for the client to check.

Billed publishes this page. The Billed details below come from Billed's own product pages, checked on October 29, 2026.

Agree on the terms before the first hour

Before you start, cover these in the agreement or the estimate:

• Rates: one rate, or a rate for each role or type of work.
• Time increments and rounding: for example, time recorded in 6-minute (0.1 hour) or 15-minute (0.25 hour) steps, and whether each entry rounds up, rounds to the nearest step, or isn't rounded.
• What's billable: for example, whether travel, internal meetings or fixing your own mistakes are billed.
• Caps and approvals: any not-to-exceed limit, and who must approve hours beyond an estimate.
• Expenses: whether you pass costs through at cost or with a markup, and whether receipts are attached.
• Billing period and payment terms: for example, weekly or monthly, and when payment is due. See invoice payment terms explained.

For the rate itself, try the hourly rate calculator: it finds the figure per hour that covers your costs, allowing for the time you can't bill.

Keep time records the client can check

Log your time while you work, rather than piecing it together when the month closes. Each entry should show:

• When: the date.
• Who: the person, if more than one person bills time.
• What: the task, tied to a project or phase.
• How long: the time spent.

A note that says only Meeting tells the client little. A note such as Planning call with Jordan: agreed on the homepage layout and next steps tells them what they paid for.

Convert minutes to decimal hours

Invoices multiply hours by a rate, so minutes need converting first: decimal hours = hours + minutes ÷ 60. For example, 2 hours 15 minutes becomes 2 + 15 ÷ 60 = 2.25 hours. Likewise 1 hour 20 minutes becomes 1 + 20 ÷ 60 = 1.33 hours (rounded), not 1.20. Billed's hourly invoice template page describes "An hourly invoice for billing dated time entries, each with the task, decimal hours and rate".

Worked example: one week of hourly work

The consultant, client and figures here are a sample, invented for this example.

A consultant bills $120 an hour. The agreement says time is billed in 6-minute (0.1 hour) steps, and each entry rounds up to the next step. This week's entries:

• Monday, kickoff call: 1 h 10 min = 1.17 h, rounded up to 1.2 h.
• Tuesday, research: 2 h 45 min = 2.75 h, rounded up to 2.8 h.
• Thursday, draft report: 3 h 20 min = 3.33 h, rounded up to 3.4 h.
• Friday, revisions: 50 min = 0.83 h, rounded up to 0.9 h.

Billed hours: 1.2 + 2.8 + 3.4 + 0.9 = 8.3 h. Amount due: 8.3 × $120 = $996.00.

Without rounding, the same week is 70 + 165 + 200 + 50 = 485 minutes, or 485 ÷ 60 = 8.08 h, and 485 ÷ 60 × $120 = $970.00. Rounding each entry up added $996.00 − $970.00 = $26.00. That's why the rounding rule belongs in the agreement. State it on the invoice too, so the client can follow the numbers.

Lay out the invoice

• Header: the invoice number, the dates it was issued and is due, and the period it covers.
• Time lines: each entry's date, task, hours and rate with its line amount, or grouped by task, phase or role if the client prefers. Ask the client once which view they want, then keep it.
• Expenses: on separate lines from time, with receipts if the agreement requires them. For more on line layout, see how to create itemized invoices.
• Totals: total hours, the subtotal, tax where it applies, and the balance due.
• Notes: the rounding rule, progress against any cap, and how to pay.

You can build the invoice from your invoice templates or the invoice generator.

Caps, approvals and changes

• Caps: if there's a not-to-exceed limit, show hours used against it on each invoice, and tell the client before you reach it.
• Approvals: if the client approves hours before you invoice, send them your time records for each period so the invoice holds no surprises.
• Rate changes: give the notice your agreement requires, and show the new rate and its start date on the first invoice it applies to.
• Write-downs: if you decide not to bill time, such as hours spent fixing your own mistake, leave it out or show it as no charge, so the client sees the decision.

If a client questions hours anyway, see the guide to resolving invoice disputes.

Hour bundles and retainers

If a client prepays a monthly block of hours, a recurring invoice can bill the base amount on a schedule, with a separate invoice for any hours over the bundle. Billed's recurring invoices page says "Invoices are created automatically and sent to your customers according to your settings."

Where Billed fits

Billed's timesheets and time tracking page says you can "Log time for each task as you work, and see how much time goes into each project," and that "Billed breaks your time down by day and by week, so a missing entry is easy to spot before you bill." For hourly work, it says: "Create an hourly rate project, set its hourly rate, and Billed tracks the charge for each task as you log it. From the project dashboard you can invoice one task or several at once." It also says you can create timesheets "and export them when a client or your accountant needs a copy."

For payment, Billed's accept payments page says "Billed integrates with Stripe to enable online payments on invoices," and you can "Keep track of all the payments from offline sources like checks, cash etc."

When hourly invoicing isn't the right fit

Hourly billing suits work whose scope is hard to fix in advance, such as exploratory projects, ongoing support or open-ended advice. If the client needs a fixed budget, a fixed fee, a capped hourly arrangement or milestone billing may suit them better. It's written with freelancers and small businesses in mind; larger firms with formal billing systems may have their own rules for time entries. For more on billing your work, see how to invoice for freelance work.

Related Articles

• How to Create Itemized Invoices
• How to Invoice for Freelance Work
• Invoice Payment Terms Explained

Frequently Asked Questions

What should an hourly invoice include?

Open with the invoice's number and its two dates, issued and due, plus the period it covers. Then list each time entry with its date, task, hours, rate and line amount. Finish with total hours, the subtotal, tax where it applies and the balance due, plus your rounding rule and how to pay.

How do I write minutes as decimal hours?

Take the minutes, divide them by 60, and add the result to the full hours. Fifteen minutes is 0.25, so 2 hours 15 minutes comes to 2.25 hours; twenty minutes is about 0.33, so 1 hour 20 minutes comes to roughly 1.33 hours rather than 1.20.

Can I round billed time up or down?

Only in the way your agreement says. State the increment and whether entries round up or to the nearest step. In the sample on this page, rounding each entry up to 0.1 hour turned 485 minutes into 8.3 billed hours, $996.00 instead of $970.00 at $120 an hour.

How detailed should time entries be?

Enough for the client to see what every entry covered: its date, the person who did the work when several people log hours, the task and the time taken.

How do I avoid surprises on an hourly invoice?

Agree on your rates, rounding and what's billable before you start, share time records during the project if the client wants them, and tell the client before you reach any cap.