Question 1

What should a consulting invoice include?

Accepted Answer

A project or engagement reference (ideally tied to your signed proposal or SOW), a PO number, the service period the invoice covers, the fee basis (hourly, day rate, fixed fee, retainer or milestone), the lead consultant's name, and — for cross-border B2B work — both your and the client's VAT/tax ID, alongside the usual invoice basics.

Question 2

How do I invoice hourly vs day rate vs fixed fee vs retainer work?

Accepted Answer

Hourly and day-rate work is billed per line with the date and hours/days worked; fixed-fee and milestone work is billed as a single line per deliverable; retainer work bills a flat recurring fee and tracks drawdown separately (see below) rather than itemizing every hour on the invoice itself.

Question 3

Do I charge VAT or GST on expenses I recharge to a client?

Accepted Answer

Generally yes. Expenses you incur to deliver the engagement — travel, accommodation, even underlying zero-rated costs like train fares — are recharged with VAT/GST at your consulting rate because you're acting as principal. Only genuine disbursements, where you pay a cost purely as the client's agent (e.g. a government filing fee), fall outside the scope of VAT. Mark each expense line taxable or not to reflect this.

Question 4

Do consultants charge VAT or sales tax on their fees?

Accepted Answer

In every EU/EEA/UK/CH market studied, consulting is standard-rated with no reduced rate or blanket exemption. In the US, most states don't tax consulting services, but Hawaii, New Mexico, South Dakota and West Virginia tax services generally, and Connecticut specifically taxes management consulting at 6.35%. Malaysia charges 8% Service Tax (Group G) once turnover passes RM500,000.

Question 5

How does the reverse charge work when I invoice a business client in another EU country?

Accepted Answer

Under Article 44 of the EU VAT Directive, cross-border B2B consulting is taxed where the customer belongs, not where you're established. You charge 0% VAT, add a "reverse charge" note, and show both your VAT number and the client's — the client self-accounts for the VAT in their own country under Article 196. The same outside-the-scope logic applies when a UK consultant bills an EU business client, and vice versa.

Question 6

What is a PO number and why do corporate clients reject invoices without one?

Accepted Answer

A purchase-order number is the reference a client's accounts-payable system uses to match your invoice to an approved spend commitment. Most mid-size and large organizations will not process payment on a consulting invoice that omits it, so always ask for one before you start billing a new corporate client.

Question 7

How do I show withholding tax on a consulting invoice?

Accepted Answer

Several markets require the client to withhold part of your fee and remit it to the tax authority directly: Spain (IRPF retention, 15% or 7% for new autónomo professionals), Italy (ritenuta d'acconto 20% on ordinary-regime consultants, plus rivalsa INPS 4% for Gestione Separata), Portugal (IRS withholding 23%), Greece (20% above €300 per payment for sole proprietors), Mexico (ISR 10% plus two-thirds of IVA), Brazil (ISS, IRRF and CSRF depending on regime) and Japan (10.21% on individual consultants). This tool models withholding as a negative, non-taxable line item showing the gross fee, the deduction, and the net payable — never as a negative tax rate.

Question 8

How do I invoice a retainer, and how do I show hours drawn against it?

Accepted Answer

Bill the flat recurring retainer fee as its own line (e.g. "Monthly advisory retainer — up to 10 hours"), and use this tool's Amount Paid field plus a notes line such as "Applied from retainer: hours used this period / balance remaining" to track drawdown — retainer balances are never modelled as a tax adjustment.

Question 9

What payment terms are normal for consultants?

Accepted Answer

Net 30 is the most common standard, often with a deposit for new engagements and a stated late-fee policy. Under the EU Late Payment Directive, businesses can add statutory interest plus a fixed €40 recovery fee to overdue B2B invoices, and France requires this penalty rate and indemnity to be stated on every B2B invoice regardless of whether you intend to enforce it.

Question 10

What is the difference between a consulting invoice and a freelance invoice?

Accepted Answer

This tool is built around the engagement — a scoped project or retainer with a PO number, service period, fee basis and (often) a signed SOW, aimed at management, IT, HR or marketing consulting and advisory work. A freelance invoice is built around your self-employed or sole-trader tax status instead, and covers any kind of gig or creative work for varied clients rather than a specific consulting engagement. If you're billing a scoped consulting project with a PO number and day rate, use this tool; if you're invoicing as a freelancer for general project work, use the freelance invoice generator.

Question 11

Can I invoice consulting work without a registered company?

Accepted Answer

In most countries, yes — many solo consultants trade as a sole trader, Einzelunternehmer, auto-entrepreneur or autónomo rather than through a limited company. The tax and withholding rules above still apply based on your individual status, and in markets like Poland, consulting services are excluded from the small-business VAT exemption regardless of turnover, so check your local registration requirement before issuing your first invoice.

Beschreibung	Menge	Preis	Betrag
Discovery & stakeholder interviews (2 days)	2	CHF0.00	CHF0.00
Market & competitor analysis — written report (fixed fee)	1	CHF0.00	CHF0.00
Strategy workshop facilitation (on-site)	1	CHF0.00	CHF0.00
Implementation support & follow-up calls	4	CHF0.00	CHF0.00
Monthly advisory retainer (up to 10 hours)	1	CHF0.00	CHF0.00
Travel & accommodation recharged at cost	1	CHF0.00	CHF0.00
Registration/filing fee paid as client's agent (disbursement — outside scope of VAT)	1	CHF0.00	CHF0.00
Retainer credit applied (previously invoiced, drawn down this period)	1	CHF0.00	CHF0.00

Zwischensumme	CHF0.00
MwSt. (8.1%)	CHF0.00

Total	CHF0.00

Consulting Invoice Generator

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Free consulting invoice generator & template

What should a consulting invoice include?

How do I bill hourly work, day rates, fixed fees, retainers and milestones?

How do I bill travel and expenses back to a client?

FAQs about consulting invoices