How to invoice contractor accommodation: a finance team's guide

When a business pays for accommodation used by contractors or project teams, the invoice has to do more than show an amount due. It needs to carry enough information for the customer organisation's finance and procurement process to identify what the accommodation relates to, the relevant project or site where applicable, the dates or billing period covered, the supplier and customer details, an invoice or booking reference, and any purchase order or internal reference that organisation requires. Requirements differ between organisations, so the practical aim is to agree what is needed before the first invoice is raised rather than correcting it afterwards.

This article is written for the people who deal with that in practice: finance and procurement teams, project and operations managers, and HR or workforce teams in construction, engineering and infrastructure organisations, along with any business arranging accommodation for contractors or mobile employees. For background on the accommodation itself, see what contractor accommodation means and the comparison of contractor digs and serviced apartments.

What should a contractor accommodation invoice contain?

Some details appear on almost any business invoice, and some are specific to the customer's own procurement system. It helps to treat them separately. Generally useful information includes:

• Supplier business name and contact details
• Invoice number and invoice date
• Customer organisation name and billing details, matching the entity that placed the order
• A clear description of the accommodation or service supplied
• The relevant dates or billing period
• The billing basis where relevant, such as nights, weeks or a stated period, and the quantity
• The amount due and payment information
• Any tax information required by the customer's finance process

Alongside that, a particular customer may also require a purchase order number, a project or site reference, a cost centre, a department, or a specific booking reference before the invoice can be approved. Those requirements are set by the customer, not by the supplier, so confirming them early avoids rework. Invoice content requirements also depend on the nature of the supply and the organisations involved, so your own finance team should confirm what your process needs.

Do contractor accommodation invoices need a purchase order?

Not every organisation works to purchase orders, but many company customers do, and where one is required an invoice without it will usually sit unapproved. Where POs are used, a few practical points tend to prevent avoidable queries.

• Confirm the correct PO or reference number before the first invoice is raised
• Check whether the organisation wants a single PO covering the project or separate references per site, property or period
• Make sure the PO value and period reflect the accommodation actually agreed, including any changes
• Quote the PO on the invoice exactly as issued, so it matches in the customer's system

How should accommodation be referenced against a project?

Where accommodation supports a specific project, a project or site reference makes it far easier to allocate cost correctly and to review spend later. Useful references can include the project name or number, the site, an internal cost centre, or the department that requested the accommodation. A worker or booking reference can help where the organisation needs to reconcile who a stay related to, though it is sensible to keep personal information to what is genuinely needed for that purpose.

Why do accommodation dates and billing periods matter?

Dates are one of the most common sources of invoice queries, so they should be unambiguous on the invoice or its supporting information. That normally means the start or check-in date, the end or check-out date where the stay has concluded, and the billing period the invoice covers. Where dates have changed by agreement during the project, the billing information should reflect the change so that the invoice matches what was actually arranged. Specific terms, notice arrangements and how changes are handled are set out in the agreement for each booking rather than being standard across all accommodation.

How should multiple occupants, properties or sites be handled?

Larger workforce requirements add complexity because a single project may involve several occupants, more than one property, several sites and different accommodation periods. There is no single correct invoicing method; what matters is that the invoice and its supporting information can be reconciled without a chain of emails. In practice, organisations tend to find one of these approaches workable.

• A consolidated invoice with clear line items per property, period and reference
• Separate invoices per site, project reference or cost centre where the organisation allocates cost that way
• A consistent booking reference on each line so entries can be matched to a specific stay
• A supporting schedule listing property, dates and reference for each line item

What supporting information helps reconciliation?

Some finance teams can approve an invoice from the invoice alone; others reconcile it against their own records first. Where supporting information is needed, the details that usually help are the booking or reference number, the property or location, the dates covered, the project or site reference, the purchase order number, and any billing reference agreed at the outset. Agreeing which of these will appear, and where, is normally a short conversation at the start of a project.

What happens when accommodation requirements change?

Project accommodation rarely stays exactly as first planned. Dates move, headcount changes, and stays are sometimes extended or ended earlier than expected. Each of those has a billing consequence, so the practical safeguard is to keep the billing information aligned with what has actually been agreed: confirm the change in writing, note whether it affects the period, property or occupancy, and check whether the purchase order still covers the revised arrangement. Changes are subject to agreement and to the terms of the individual booking, rather than being automatic.

VAT considerations when invoicing contractor accommodation

MJ3 Relocations is currently not VAT registered. As a result, MJ3 Relocations does not currently charge VAT on its invoices, and you should not expect to see a VAT amount or a VAT registration number on an MJ3 invoice while this remains the case.

How the accommodation is treated for VAT or tax purposes in your own organisation, and any questions about recovering VAT or including the cost in your accounts, are separate matters that depend on your circumstances. Your finance team or accountant should confirm the appropriate treatment for you.

If MJ3 Relocations' VAT registration status changes in the future, its invoicing will be updated accordingly.

Common invoicing problems worth avoiding

Most accommodation invoice queries come from a small number of avoidable issues.

• A missing or incorrect purchase order or internal reference
• No project or site reference, so cost cannot be allocated
• Billing dates that are unclear or do not match the stay
• A customer company name that does not match the entity on the order
• A description too vague to show what was supplied
• Several properties billed together without being separately identified
• Agreed changes to dates or occupancy not reflected in the billing information

Finance and procurement checklist

Exact requirements vary between organisations, so treat this as a starting point rather than a standard. Before submitting or approving an accommodation invoice, check:

• Supplier and customer details are correct and match the order
• The invoice number and any booking reference are present
• The purchase order or internal reference is quoted where your process requires one
• The project, site or cost centre reference is correct
• The accommodation dates or billing period are accurate
• The description clearly identifies what was supplied and where
• The amount and billing basis agree with what was arranged
• Any supporting schedule covers each property, occupant period and reference
• VAT or tax information is shown as provided by the supplier and confirmed with your finance team

How MJ3 Relocations can help

MJ3 Relocations, the accommodation brand operated by MJ3 Management Solutions Ltd, arranges and sources temporary furnished accommodation for contractor, workforce and project requirements. Practically, that means agreeing the accommodation and the billing information together: which entity is invoiced, the purchase order or project reference your finance team needs, how the dates and properties should appear, and how changes during the project are confirmed. Payment terms, invoicing frequency and any other commercial arrangements are agreed for each booking rather than being fixed here. You can see more about the service on contractor accommodation, how a request is handled on how it works, and the wider service overview on accommodation solutions.

Summary

Accommodation invoices are approved quickly when they identify the customer entity, the accommodation supplied, the dates, and the references that organisation uses to allocate cost, and when agreed changes are reflected in the billing information. The simplest way to get there is to settle the purchase order, project reference and supporting detail before the first invoice rather than after it. If you are arranging accommodation for a project and want the billing set up to suit your finance process, get in touch with MJ3 Relocations.