Pre-invoicing is the step that turns the hours your team has logged into a provisional billing document, by client and by project, before the invoice is issued. It is where you confirm what will be charged, correct mistakes while they are still cheap to fix, and hand figures that already add up to your certified invoicing software or your accountant.
In consultancies, agencies, engineering practices and IT service companies, hours are the product. When the path from timesheet to invoice runs through spreadsheets and email, the month-end close takes days and the margin on each project is only known once the month is over.
What is pre-invoicing for project hours?
A pre-invoice, often called a pro forma, is an internal document, or one sent to the client for approval, that gathers the work done in a period and prices it according to the agreed terms. It has no tax value. In Portugal, the invoice itself must be issued by invoicing software certified by the Tax Authority.
A good pre-invoice answers five questions.
- Who for. The client and, where relevant, the contract or purchase order.
- What for. The projects and tasks in which the work was done.
- How much. The hours of each person or role, split between billable and non-billable.
- At what rate. The rate agreed with that client, per hour, per role or per package.
- For which period. The dates the invoice covers, so that no hour is billed twice or forgotten.
Why does manual billing of hours go wrong?
When hours live in one spreadsheet per person, or in a time-tracking tool that does not know each client's rates, someone has to pull everything together at the end of the month. That manual work is where the most common errors creep in.
- Missing hours. Some people log the week's hours from memory on a Friday, others forget altogether. What is not logged is not billed.
- Wrong rates. A client with a negotiated price is charged the standard rate, or a senior role is billed as a junior one.
- Non-billable hours charged, or the reverse. Internal meetings, training or rework end up on the invoice, while the hours spent on an extra request are left out.
- A slow close. The pre-invoice is only ready days after month-end, and the invoice reaches the client later than it could.
- Margin discovered too late. Only after invoicing does it become clear that a project used more hours than budgeted.
None of these errors comes from carelessness. They come from time tracking and invoicing living in separate places, joined together by manual copying.
How do you go from logged hours to an invoice, step by step?
The process that works best has seven steps, and the first five happen during the month rather than at the end of it.
- Log hours by task, every day. Daily logging is more reliable than rebuilding the week from memory. A missing-hours reminder helps keep the habit.
- Link every task to a project and a client. This link is what lets you price the hours without extra work.
- Mark what is billable. Decide up front which types of work are charged and which remain an internal cost.
- Approve the hours. The project manager approves the team's hours throughout the month, instead of reviewing them all on the last day.
- Apply each client's rates. The agreed terms are stored once and applied automatically to every approved hour.
- Generate and review the pre-invoice. At month-end, each client's pre-invoice comes straight from the approved hours, and the review focuses on the exceptions.
- Issue the invoice in the certified system. The pro forma goes to the invoicing software or to the accountant, who issues the tax document.
Time tracking is the foundation for everything else. If you are weighing up how to bring hours, leave, projects and pre-invoicing together, our article on centralised operations management explains how to prepare the transition.
A practical example in a consultancy
Imagine a consultancy of 12 people working for 8 clients, each with its own rate. Today, every consultant fills in a weekly spreadsheet, and at the start of each month the office manager gathers the 12 files, checks doubtful hours with the project managers and builds one pre-invoice per client by hand.
In this example, the close takes a week, and almost every month brings at least one correction, whether a wrong rate or a day's work that was never logged.
With hours logged by task on a single platform, approved by managers during the month and linked to each client's rates, the same consultancy has its 8 pre-invoices generated on the last working day. The office manager reviews the flagged cases, exports the pro formas and sends them to the invoicing software. Each project's margin is followed throughout the month, not only after invoicing.
What should you look for in a pre-invoicing tool?
Not every time-tracking tool solves pre-invoicing. These criteria help tell them apart.
| Criterion | Spreadsheets | Time-tracking only tool | Integrated platform |
|---|---|---|---|
| Hours by task, project and client | Depends on each person | Yes | Yes |
| Manager approval | By email | Sometimes | Yes, with approval flows |
| Rates per client | In a separate file | Rarely | Yes |
| Pre-invoice generated from the hours | Built by hand | Export that still needs work | Yes |
| Project margin during the month | No | No | Yes |
| Leave and absences in the same place | In another sheet | In another tool | Yes |
Two further points are worth checking whatever you choose. The first is the connection to the certified invoicing software the organisation already uses, because a pre-invoicing tool should not replace it. The second is where the data is stored and whether it can be exported at any time.
How does Engi360 prepare pre-invoicing?
Engi360 is the Engibots operations management platform for teams that bill hours or run projects for clients. It brings together hours, leave, projects, tasks, people management, documents and pre-invoicing, and the Engibots team uses it every day, from time tracking to pre-invoicing.
- Hours and timesheets by task, with approval, AI suggestions and missing-hours alerts.
- Client rates, team workload and margin per piece of work, visible before the month closes.
- Pre-invoicing generated from the hours logged, with the pro forma ready to send to your accountant or certified invoicing software, and an invoicing roadmap by project and client.
- Leave and absences with balances and approvals, so that team capacity and billed hours tell the same story.
Engi360 does not issue certified invoices. It prepares the data for whoever issues them, and issuing always stays on the certified side. Data is stored on Microsoft Azure in European data centres and can be exported at any time.
The free plan includes the seven core modules, among them hours, leave and absences, and projects and tasks, with the whole team for the first 14 days and then up to 3 users, with no credit card. Pre-invoicing is included in the Professional and Scale plans.
Frequently asked questions
What is pre-invoicing for project hours?
It is a provisional document, or pro forma, that gathers the hours logged in a period by client and project and prices them at the agreed rates, so they can be confirmed before the invoice is issued.
Does a pre-invoice replace the invoice?
No. A pre-invoice has no tax value. In Portugal, the invoice must be issued by invoicing software certified by the Tax Authority, using the figures the pre-invoice has confirmed.
What are the most common errors when billing hours?
Hours that were never logged, rates mixed up between clients, internal hours billed by mistake and extra requests left out. Most of them come from manual copying between time tracking and invoicing.
How often should hours be approved?
Ideally, hours are logged every day and approved throughout the month, by week or by project. Leaving approval to the last day concentrates the work and delays the invoice.
Does Engi360 issue invoices?
No. Engi360 prepares pre-invoicing from the hours logged and hands the pro forma to your accountant or certified invoicing software, where the invoice is issued.