How to Create Itemized Invoices: Line Items, Totals and a Sample

An itemized invoice lists each charge on its own line, with a description, a quantity, a unit price and a line total, instead of one amount for services. The line totals add up to a subtotal, then any discount and tax are shown separately, ending with the total due. Itemizing lets your client check each charge against what they asked for, and gives you a clear record of what you sold.

Billed publishes this page.

What each line item needs

• Description: specific enough that someone outside the project knows what it was, such as Homepage design, final files rather than Design.
• Quantity: hours, units, pages, licenses or sessions.
• Unit price: the rate for one unit.
• Line total: quantity × unit price.
• Date or period, if it helps, such as the week the hours were worked or the month a subscription covers.

If the client gave you a purchase order or a statement of work, use their wording and reference numbers in your descriptions so their accounts payable team can match each line. Give the invoice its own invoice number.

How to build the invoice, step by step

1. List everything you're billing for this period, from your contract, time records and receipts.
2. Write one line per charge, with its quantity and unit price. Group small related tasks under one line if the client prefers fewer lines, but keep the description clear.
3. Put pass-through costs on their own lines, such as stock images or materials you bought for the client, and say whether they're billed at cost or with the markup your contract allows.
4. Add the subtotal, the sum of the line totals.
5. Show any discount as its own line, with what it's for, instead of lowering unit prices without explanation.
6. Add tax, if it applies, showing which lines it applies to and the rate. Which items are taxable depends on where you sell, so ask your accountant.
7. Show the total due, the due date and how to pay.
8. Check the math before you send: line totals, subtotal, discount, tax and total.

Worked example: a sample itemized invoice

The business and figures here are a sample, invented for this example. This sample has no sales tax.

A freelance web designer sends invoice INV-2041:

1. Homepage design, final files: 1 × $1,200.00 = $1,200.00
2. Inner page templates: 4 × $350.00 = $1,400.00
3. Copy editing: 6.5 hours × $80.00 = $520.00
4. Stock photo licenses, at cost: 3 × $45.00 = $135.00
5. Subtotal: $1,200.00 + $1,400.00 + $520.00 + $135.00 = $3,255.00
6. Returning-client discount, 5% of the design lines (1 and 2): 5% × $2,600.00 = −$130.00
7. Total due: $3,255.00 − $130.00 = $3,125.00, due in 15 days.

Each line shows what it covers and how its amount was worked out, the pass-through cost is separate from the fees, and the discount says which lines it applies to.

Discounts, taxes and pass-through costs

• Discounts: label them, such as Returning-client discount, 5% of design lines, and show them as a negative line or a separate line after the subtotal.
• Taxes: if items have different tax treatment, show which lines are taxed and at what rate. Ask your accountant which of your items are taxable.
• Pass-through costs: keep them apart from your fees, and attach the receipt if your client asks for it.

Long or recurring invoices

• Long invoices: for a big project, put a short summary at the top with subtotals by category, such as fees, expenses and licenses, and the detailed lines below or in an attached file.
• Recurring invoices: keep the same lines each period for steady charges, and add separate lines for anything extra that period, such as additional hours.

Common mistakes

• Vague descriptions, such as Consulting or Phase 2, with no quantity or detail.
• Lines that don't add up, after a quantity or rate was changed and the total wasn't.
• Hidden discounts or markups, where unit prices are changed with no note.
• Long runs of tiny lines, which make the invoice hard to check. Group small items and keep the detail in an attachment.

Where Billed fits

Billed's invoice software page says you can "save the products and services you sell so you can pull them into an invoice instead of retyping them." Its features page says, "Save products and services in Billed App and pull these products quickly in your invoices."

The invoice software page also says, "Save your tax rates and settings once, and Billed calculates taxes automatically when you create invoices and estimates," and "Give a client a discount on an invoice, or create coupons." For supporting documents: "Add files to your invoices and estimates."

Billed's invoice generator page describes line items as "The description of products or services including name, quantity, unit price, and hourly rate if billing by hours." You can also start from Billed's invoice templates, and take payments on the invoice through online payments.

Related articles

• How to Create a Professional Invoice
• Guide to Hourly Invoicing
• Invoicing Mistakes to Avoid
• What Is an Invoice Number?

Frequently Asked Questions

What is an itemized invoice?

An invoice that lists each charge on its own line, with a description, quantity, unit price and line total, followed by the subtotal, any discount and tax, and the total due.

What should each line item include?

A clear description, the quantity, the unit price and the line total. Add a date or service period when it helps the client match the charge to their records.

How do I show a discount on an itemized invoice?

Put it on its own labeled line after the subtotal and say which lines it applies to. In the sample, a 5% returning-client discount on $2,600.00 of design work is $130.00, bringing the total from $3,255.00 to $3,125.00.

Should taxes be shown per line?

If some items are taxed and others aren't, show which lines the tax applies to and the rate. Which items are taxable depends on where you sell, so ask your accountant.

How detailed should an itemized invoice be?

Detailed enough that the client can check each charge against the work they asked for. Group small related tasks under one line and put long detail, such as timesheets, in an attachment.