What Is a Trailing Invoice?
A trailing invoice is a final bill sent after project completion to capture additional costs that couldn’t be determined earlier. These invoices are common in industries with variable project expenses and serve to:
- Reconcile actual vs. estimated costs
- Bill for unforeseen expenses
- Close out project accounts
- Comply with contractual obligations
Key Characteristics:
- Follows initial invoices (typically 30-90 days after)
- Contains adjustments rather than full amounts
- Requires detailed documentation
- Common in construction, consulting, and logistics
When to Use Trailing Invoices?
- Construction Projects
Change orders
Material price adjustments
Overtime labor costs
Consulting Services
Additional research hours
Travel expense reconciliations
Software licensing fees
Transportation/Logistics
Fuel surcharges
Storage fees
Customs/duty adjustments
Manufacturing
Raw material overages
Quality control rework
Equipment rental extensions
Trailing Invoice vs. Final Invoice
| Feature | Trailing Invoice | Final Invoice |
|---|---|---|
| Timing | After project close | At completion |
| Purpose | Cost adjustments | Full payment |
| Amount | Partial (5-20% of total) | 100% balance |
| Frequency | Often multiple | Single |
| Approval | Requires validation | Pre-approved |
Essential Components of a Trailing Invoice
Required Elements:
Clear Labeling – “Trailing Invoice” header
Project Reference – Original PO/contract number
Date Range – Service period covered
Adjustment Details – Line-item explanations
Supporting Docs – Receipts/timesheets
Payment Terms – Net 15 typical
Contact Info – AR manager details
Example Structure:
Trailing Invoice #TJ-2023-045-R1 Original Invoice: #TJ-2023-045 Project: Office HVAC Installation Adjustments: - Additional ductwork (4hrs x $85) = $340 - Emergency weekend surcharge = $225 Total Due: $565 Payment Due Within 15 Days
Best Practices for Trailing Invoices
For Suppliers/Vendors:
Set expectations in initial contract
Document everything – photos, logs, emails
Submit promptly (within 30 days of completion)
Follow up diligently – these often get overlooked
For Clients:
Review contracts for trailing terms
Require detailed backup for all charges
Process quickly to close books
Dispute promptly if needed
FAQs
Yes, if:
Contract allows for post-completion billing
Charges are properly documented
Within statute of limitations (typically 1-3 years)
Depends on:
- Contract terms (often 30-90 days)
- Industry standards
- Local laws (some limit to 6 months)
Only with valid reasons:
Charges exceed contract limits
Lack of documentation
Missed submission deadlines
Trailing: One-time adjustments after project end
Recurring: Regular charges for ongoing services
