How to turn Clockify timesheets into contractor invoices

Most companies have a tidy process for invoicing their own clients. Receiving invoices from a pool of contractors is the opposite: hours copied by hand out of Clockify, exchange rates looked up on the day, tax and withholding worked out in a spreadsheet, and every PDF arriving in a slightly different shape. Done once it’s an annoyance. Done for thirty contractors across five countries, every month, it’s a recurring tax on your finance and ops teams.

This guide walks through how to get from an approved Clockify timesheet to a clean, tax-ready invoice — the steps, the parts that quietly eat time, and how to make the output consistent.

Why contractor invoicing eats so much time

The work isn’t hard; it’s repetitive and easy to get subtly wrong. A single contractor invoice usually involves pulling the right hours for the right period, deciding what’s actually billable, converting a currency, applying the correct tax treatment, and formatting all of it so accounts payable can read and file it.

None of those steps is difficult in isolation. The cost comes from doing them by hand, for every contractor, every month — and from the small inconsistencies that creep in when different people do it slightly differently. One invoice rounds hours, another doesn’t. One applies last month’s exchange rate, another today’s. One puts withholding on a separate line, another folds it into the total. By quarter-end, reconciliation is a hunt for why the numbers don’t tie out.

First, turn on timesheet approval

Everything below starts from approved time — and approval isn’t on by default. Before any of it works, an admin has to enable timesheet approval in the Clockify workspace settings: open Workspace settings → Approvals and switch it on. Until that’s enabled, contractors have no way to submit a timesheet for approval, and you’re stuck billing raw, unreviewed hours.

Once it’s on, the loop is simple: each contractor submits their timesheet for the period, a reviewer approves it, and only then does it become something you can invoice. Make that a standing part of the month — approval enabled, contractors submitting, a reviewer signing off. It’s the foundation the five steps below rely on.

The five steps from timesheet to invoice

1. Lock the period and approve the hours

Start from approved time, not raw time. In Clockify, hours move through review and approval before they should ever be billed. Lock the period so the timesheet can’t shift underneath you after you’ve generated an invoice — an invoice built on hours that later change is a correction waiting to happen.

2. Separate billable from non-billable time

This is the step most manual processes get wrong. An approved timesheet can contain both billable and non-billable time — internal meetings, admin, training. Only time that is both approved and billable belongs on the invoice. Pull billable hours specifically; don’t invoice the whole approved total and reconcile later.

3. Convert currencies at a defensible rate

If a contractor tracks in one currency and invoices in another, you need a rate — and “the first number a search engine returned” is not a rate you want to defend in an audit. Use an official, dated reference: the European Central Bank publishes daily rates that are widely accepted for exactly this. Apply the rate for the invoice period, record which rate you used, and apply it consistently across every contractor so two invoices for the same period don’t disagree.

4. Apply the right taxes and withholding

Two different things happen here, and it helps to keep them separate:

• Additive taxes (VAT, GST, sales tax) are added on top of the line total.
• Withholding is deducted from the amount paid, and what it’s called varies by country — IRPF in Spain, TDS in India, and so on.

Model them as distinct lines. An additive tax increases what you owe; a withholding line reduces what you pay out and is remitted to the tax authority instead. Folding both into one figure is where invoices become impossible to reconcile.

5. Standardize the output

Finally, produce the invoice in a single, consistent format — the same layout, the same fields, the same line structure for every contractor. A standardized PDF is predictable to read, predictable to reconcile, and predictable to file. It also drops straight into your existing accounts-payable workflow instead of forcing someone to re-key it.

Doing it by hand vs automating it

You can do all five steps manually, and plenty of teams do. A reasonable manual process looks like: export approved billable hours from Clockify, look up the period’s exchange rate, calculate tax and withholding in a template, and save a PDF named consistently. Repeat per contractor.

The problem isn’t any single invoice — it’s the multiplication. Thirty contractors is thirty repetitions of a fiddly process, and the inconsistencies between them are what cost you at reconciliation.

Automating it removes the repetition and the drift. BillMyTime is a Clockify add-on that reads approved, billable hours and produces a standardized, tax-ready PDF in under ten seconds — ECB exchange rates, configurable tax and withholding, the same format every time. The five steps above still happen; they just stop being manual. You can see how it works or what it includes on the product page.

A quick checklist

Before an invoice goes out, confirm:

• Hours are approved and the period is locked
• Only billable time is included
• The exchange rate is an official, dated reference, applied consistently
• Additive taxes and withholding are on separate, correctly-labelled lines
• The output is a standardized PDF your AP process can ingest as-is

Get those five right, every time, and contractor invoicing stops being a monthly headache — whether you run it by hand or hand it to a tool.