Small manufacturers, job shops, and contract fabricators invoice customers for parts, assemblies, and production runs made to their specifications or from the shop's own designs. Typical billing covers per-piece production, setup and tooling charges, materials, finishing, and freight. Many work from a customer purchase order, so the invoice has to match the PO closely to get paid.
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Most manufacturing work is priced per piece or per lot, built up from materials, machine time, labor, setup, and overhead, plus margin. One-time costs such as setup, programming, fixtures, and tooling are usually billed separately (non-recurring engineering, or NRE) or amortized into the piece price at stated volumes. Prototype and short runs carry a higher unit price because setup is spread across fewer parts, and price breaks apply at higher quantities. Shops that bill by time use machine-hour rates that differ by equipment (a CNC mill versus a manual lathe), plus a separate rate for hand labor, assembly, or inspection. Materials are either passed through at cost plus a markup or built into the piece price, and surcharges for volatile metals or resin are common. Outside services like plating, heat treat, or powder coating are billed at cost plus a handling markup. Freight and packaging are typically separate lines unless quoted as delivered.
| Service | Priced | Typical range |
|---|---|---|
| CNC machining (mill or lathe) shop rate | per machine hour | $65-150 |
| Manual machining or fabrication labor | per hour | $50-95 |
| Welding and fabrication labor | per hour | $55-110 |
| Production setup / programming (NRE) | flat fee per job | $150-1,500 |
| Prototype part (simple, 1-10 pcs) | per piece | $40-400 |
| Light assembly and kitting | per hour | $30-60 |
| Inspection / first article report | per report | $75-500 |
| Custom fixture or tooling design | per hour | $75-150 |
Typical US ranges. Rates vary by region, experience, and job size.
| Description | Qty | Rate | Amount |
|---|---|---|---|
| Aluminum 6061 bracket, P/N BR-2210 Rev C, machined and deburred (PO 48217) | 500 pieces | $14.50 | $7,250.00 |
| Setup and CNC programming (one-time NRE) | 1 flat fee | $650.00 | $650.00 |
| Clear anodize, outside service (cost plus 15% handling) | 500 pieces | $2.30 | $1,150.00 |
| First article inspection report with dimensional data | 1 report | $225.00 | $225.00 |
| Packaging and palletizing | 1 flat fee | $85.00 | $85.00 |
| Freight, LTL to customer dock | 1 shipment | $240.00 | $240.00 |
| Total | $9,600.00 | ||
Notes: PO 48217. Shipped complete, 500 of 500 pieces, on 3/14. Net 30 from invoice date. A 1.5% monthly late fee applies to overdue balances. Any quality claims must be reported within 15 days of receipt. Certificate of conformance and material certs attached.
Accounts payable departments often match invoices to POs and reject or hold anything that does not line up.
Confirms exactly which drawing version was built, which settles disputes if the design changed mid-order.
Partial shipments and overruns or underruns are common, and the invoice should show what is being billed now versus later.
Customers need to see one-time charges apart from piece price so they can compare reorder pricing.
Shows pass-through costs clearly, especially when metal or resin prices moved after the quote.
Proves delivery and starts the payment clock for customers who pay from receipt.
Material certs and certificates of conformance may be required to pay, and tax treatment depends on the state and whether the buyer provides a resale certificate.
Net 30 is the standard for commercial manufacturing, with larger customers sometimes pushing for net 45 or net 60. New customers and custom work usually warrant a deposit of 30-50% up front to cover material and tooling, with the balance due on shipment or net terms. Tooling and NRE are often billed in full at order or at first article approval. Progress billing is common on long production runs or large assemblies. Early-pay discounts such as 2% 10 net 30 are used occasionally. Late fees of 1-1.5% per month are common if stated on the quote and invoice in advance. Payment is usually by ACH, check, or wire, and card payments are accepted by some shops with a surcharge.
If setup is buried in the unit price, a customer who reorders 50 pieces will expect the same price as the original 500. Listing NRE and setup on their own lines keeps reorders priced fairly.
Many customers treat the ship date as the start of payment terms. Invoice the day the parts leave, and send the packing slip and certs with it so nothing delays approval.
State on the quote that pricing is good for a set number of days and that material cost changes may be passed through. Without that language, you absorb price swings on steel, aluminum, or resin.
Agree on an acceptable quantity tolerance, such as plus or minus 5-10%, so you can bill what you actually shipped without a dispute.
If a customer sends material or owns the tooling, note it on the invoice and your records. It affects billing, storage charges, and who is responsible for scrap.
Yes, unless the setup is already built into a quoted price at a specific quantity. Repeat orders still require setup time, tooling changes, and first piece checks, so many shops charge a reduced reorder setup fee.
Invoice only what shipped, with the PO line showing quantity ordered, quantity shipped, and balance remaining. Do not bill one-time charges like NRE twice, so mark them as billed on the first invoice.
It depends on the state and the buyer. Many states exempt items bought for resale or for use as components in other products if the buyer gives you a valid resale or exemption certificate. Keep that certificate on file, and check your state's rules or ask an accountant.
Review the drawing and inspection data first. If the parts are out of tolerance, rework or remake them and credit or reissue the invoice as agreed. If they meet the print, document it with inspection records and hold to your terms.
You can if the quote or terms state it. Include a clause that finished goods held more than 15 or 30 days after notice are billed at a storage rate or invoiced in full.
Send a Manufacturing estimate for approval, then turn it into an invoice when the work is done.
Manufacturing estimate template