Lost T&M tickets mean lost revenue. If you are relying on paper forms or slow approvals, you are leaving money on the table. Subcontractors do the work before approvals come through, but when tickets go missing or get disputed, that work can go unpaid, killing profit margins.
According to statistics, 14% of all construction remodeling may have been caused by insufficient data, which has created $88.69 billion in rework globally.
Tracking time and materials (T&M) is a pain for everyone. Poor tracking and slow access to data make it hard for subcontractors to keep up with costs. T&M tracking is a challenge, and it’s costing you time and money. So, the best solution is to utilize time and material tracking software.
Track time and materials accurately—no guesswork, no wasted dollars. This software keeps your costs in check, eliminates disputes, and ensures every hour and material is accounted for. This blog will guide you on the best practices for T&M tracking that are designed to address the difficulties faced by project managers, contractors, and subcontractors.
What is a Time and Materials Contract?
A time and materials contract is a legally binding agreement that summarizes the compensation structure for a subcontractor. This contract is based on the actual time that was worked and the resources that were utilized during the project.
This type of contract is particularly used in construction project management. However, it can also be used in other fields, such as engineering, software creation, and other project types where the scope of the project may not be defined at the beginning.
Under this agreement, the subcontractor is responsible for meticulously tracking the hours that are spent on the project and the materials consumed by their team or by themselves. This data is essential as it directly impacts the invoicing process.
Contractors generate invoices based on recorded hours and materials, which provides transparency and ensures that project owners are billed accurately for the services that are utilized throughout the duration of the project. To track time and expenses efficiently, project owners, contractors, and subcontractors should use a reliable time and material tracking app like SmartBarrel.
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Importance of Time and Material Tracking is Essential For T&M Contracts
Accurately recording communications clears up any confusion about payments. Subcontractors must track all the operational expenses, which also include overhead costs. Work done outside of the contractual agreements can lead to significant financial risk for everyone involved.
Construction projects are always changing. That’s why tracking time and materials accurately is more important than ever. Changes in the scope of work are common due to weather interruptions, unforeseen requests, or getting extra orders from other contractors. While project owners may issue payment invoices, subcontractors need to keep track of T&M efforts on their own.
Keeping records of labor hours and materials that are utilized for particular tasks and project categories will contribute to a recorded perspective on pricing and related expenses. Subcontractors can use this knowledge to develop future project estimates to ensure they have set realistic expectations for upcoming T&M agreements.
Subcontractors & Time and Material Ticket
For subcontractors, T&M tickets on documented tasks mean direct income. Most of the time, subcontractors carry out this work before obtaining the approvals to prevent delays in the scheduling. However, any denials or holdups can result in financial losses, which will ultimately diminish the profit margins if the work goes unreimbursed.
The time and material ticket process is prone to errors and inefficiencies due to several inherent challenges, such as:
- Poor penmanship makes handwritten T&M tickets difficult to read and interpret, which can lead to miscommunication and errors in data entry.
- T&M tickets are processed manually, which results in significant delays. Tickets can take days or even weeks to be processed. During this time, they can be misplaced or forgotten, which leads to potential revenue loss.
- Attaching photos to paper tickets is unmanageable and often requires separate emails and manual matching. This lack of integrated visual documentation can delay the verification process and lead to disputes.
Challenges in Time and Material Tracking
Time and material tracking processes are important in the construction industry, especially for subcontractors in the mechanical, concrete, electrical, solar, and glass industries. T&M contracts offer great flexibility, but they also come with a number of challenges that can impact the efficiency, profitability, and client relationships. So, let’s take a look at some common challenges in T&M tracking.
Manual Processes and Paper-Based Documentation
The most persistent challenge in T&M tracking is the dependence on manual processes. There are many contractors who still use paper-based T&M sheets for construction material tracking and record labor hours. These methods may look familiar, but they have many drawbacks.
These methods may seem familiar, but they have many problems, such as:
- Sometimes, workers might forget to clock in or out, which leads to missing or increased hours. Subcontractors often record hours for their teams, which can cause more mistakes or even dishonest reporting.
- Paper records can take days or weeks to process as they might need to go through several levels of review before they get approved. This can delay payments and put financial pressure on subcontractors.
- Paper records can easily get lost or damaged, which leads to arguments over billing accuracy.
To address this challenge, it is better to transition from manual to time and material software, which is designed to accurately track time and material. SmartBarrel offers AI-powered biometric time tracking and geo-fencing technology to provide precision, accountability, and operational efficiency.
Lack of Real-Time Visibility
Time and material tracking often has problems because it lacks real-time data. When there is no direct view of labor hours and material usage:
- Project managers can’t effectively track the progress of their team.
- Leadership can’t quickly adjust the budgets or schedules.
- Field supervisors don’t have the insights that are required to manage their teams well.
This problem is even worse at remote job sites where internet access is often limited.
Take Back Control of Your Time Keeping
Best Practices for Time and Materials Tracking
Tracking time and materials is crucial in safeguarding your profits. Losing hours, T&M tickets or having ambiguous records means you may be exposed to unpaid work and disputes. Here is how you can prevent this and have each dollar accounted for.
1. Set Clear Terms in the Contract
Prior to work commencement, make sure your contract has the following:
- Define the hourly rate for each worker type.
- Fixed percentage for materials.
- Identify any labor or cost restrictions to prevent overspending.
- Explain how and when to authorize T&M tickets.
Read through each contract prior to signing and ensure there is no room for any confusion when it’s time to bill. Walk your team through the agreement to ensure everyone knows how to track and submit T&M data correctly.
2. Make T&M Tracking a Daily Habit
Hours and materials tracked at the end of a week or project can cost you money. There should be a daily process for tracking time and materials at each job site.
On-site actions to implement:
- Log hours immediately. Workers should clock in and out in real-time without backdating.
- Record materials as they are consumed. Have a running count of what is removed from inventory.
- Obtain authorizations before proceeding. Do not allow work to accumulate without a signed T&M ticket.
Assign an individual, such as a foreman or project manager, to review and authorize T&M tickets on a daily basis. This minimizes errors and conflicts.
3. Ditch Paper, Go Digital
Paper T&M sheets may be lost, smudged, or filled out incorrectly. If you continue to use them, you lose time and money. A time and materials tracking app will eliminate these problems and accelerate approvals.
Look for these features in a tracking system:
- Operates on phones and tablets, in addition to computers.
- Guarantees that only approved individuals can clock in.
- Includes digital signatures on T&M tickets to prevent controversies.
- Automatically backs up records in case of loss.
If your current system is based on handwritten records or spreadsheets, now is the time to go to the next level. Look at time and materials tracking software that keeps it all accurate and readily accessible. Get the team trained on how to use it effectively.
4. Onboard Your Team the Right Way
Good onboarding ensures correct tracking and a successful project. If your crew doesn’t know contract terms, tracking processes, or equipment, errors will occur.
Key onboarding steps:
- Explain pay rates, hours, and limits clearly. Ensure no confusion about what is billable.
- Establish clear instructions for tracking time and materials. Demonstrate to workers exactly how and when to record data.
- Introduce processes and tools early. Educate the team on any software that will be used prior to commencement.
Conduct a kickoff meeting for a review of expectations, tracking processes, and requirements for the project. Set up a shared folder with all documentation required.
5. Keep Communication Open and Frequent
Miscommunication regarding hours worked, materials consumed, or project modifications can cause delays. Keep in touch with your team and subcontractors during the project.
Ways to improve communication:
- Hold regular check-ins. Short daily or weekly meetings can assist in discussing progress and issues.
- Utilize project management tools. Tools such as SmartBarrel assist in keeping teams organized.
- Give employees a single point of contact. Ensure they know who to contact with tracking or billing inquires.
Designate someone for field staff to contact with tracking or payment problems. This helps identify mistakes early and avoids disputes later.
Manual Time Tracking vs SmartBarrel Time Tracking
Feature | Manual Time Tracking | SmartBarrel Time Tracking |
Accuracy | Prone to human errors and time theft | AI-powered biometric verification makes sure unmatched accuracy |
Efficiency | Time-consuming and dependent on paperwork and manual entry | Real-time insights and automated reporting save time |
Technology | Basic tools like paper timesheets or spreadsheets | Advanced AI, geo-fencing and weatherproof solar-powered devices |
Accountability | Limited ability to verify worker attendance | Facial verification eliminates time theft, ensures accountability |
Take Back Control of Your Time Keeping
The Role of Time & Materials Tracking in Cost Control
One of the most significant benefits of using effective T&M tracking is cost control:
- Accurate records make sure that clients are billed only for actual work that is performed.
- Digital tracking material tool alerts you when the stock levels are low, which allows you to reorder the materials before they run out.
- Both parties can easily track costs, which ensures fair compensation and better communication.
- By keeping track of unused materials, you can minimize waste and improve profitability.
Final Thoughts
Missed hours, lost tickets, and payroll disputes can reduce your profits. If your staff still uses paper logs or sluggish approvals, getting paid for finished work is more difficult.
Proper time and material tracking is essential to avoid lost revenue and maintain timely projects. A computerized tracking system tracks each hour of work and each material consumed. This eliminates disputes and accelerates the approval process. With real-time insight, you won’t have to guess or worry about missing information.
Don’t let poor tracking hurt your budget. Get SmartBarrel to ensure accurate timekeeping, verified records, and quicker approvals. Request a Demo Now and start managing your labor costs today.
