T&M bills the GC won't pay without backup
Get the GC's signature on the ticket the day the work happens.
T&M work happens fast and the paperwork gets left in the truck. A week later the foreman can't remember who was there, the GC's superintendent says he never authorized it, and your invoice has no backup. Now you've paid wages and rented equipment for work that no one will approve. The fix is boring and it works, which is a signed ticket on the day of the work.
Three moves, in order
What CFOS does about it
In CFOS the T&M ticket rides on the foreman's daily, which already has the crew, the equipment and the photos. The GC signs it on site, and it becomes a change order draft that goes on the next pay app. T&M rate sheets, wage classes and overtime are set up once, so the ticket prices the work from your own rates. Change order numbers and revisions are kept, so you can show the GC the whole trail from ticket to approval. No one has to rebuild the backup at month end, because the daily is the backup.
Who owns this: Foreman, with the PM and office manager.
At $8M, a few unsigned $15K tickets add up fast.
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Step 06: Project management
Billing dates, change orders, and notices, written as standards that work without anyone following up on them.
Other problems step 06 solves
Other things that go wrong
What owners ask
T&M billing backup GC won't pay?
Get the GC's signature on the ticket the day the work happens. T&M work happens fast and the paperwork gets left in the truck. A week later the foreman can't remember who was there, the GC's superintendent says he never authorized it, and your invoice has no backup. Now you've paid wages and rented equipment for work that no one will approve. The fix is boring and it works, which is a signed ticket on the day of the work.
Which part of the system fixes this?
The step is number 06, project management. Billing dates, change orders, and notices, written as standards that work without anyone following up on them. It's drawn from chapter 6 of CONTROL: C.F.O.S. Construction Financial Operating System.
Is this normal for my trade?
Across the 48 trades that publish a figure, net profit at $1M to $5M averages 7% before taxes. If you're well under that and this page describes your month, the two are usually the same story. The published average tells you where the pack is, and your own job costing tells you where you are, which is the number that pays payroll.
Where do I start?
Give every foreman a T&M ticket form that lists the crew by person, hours, equipment, material and the reason for the extra work, and have the GC's superintendent sign it before anyone leaves the site.
What should a T&M ticket include to get paid?
The date, the location, who worked and for how many hours, the equipment used, the material, a description of what was asked for and who asked, and a signature from the GC's representative. Add photos if you can. A specific ticket is much harder to dispute later.
What if the superintendent won't sign the ticket?
Write on the ticket that the superintendent was asked and declined, and email the ticket to the GC's project manager the same day. That gives you a dated record that the GC knew about the work. It isn't as good as a signature, but it's far better than nothing.
Can I bill T&M on the same pay app as the base contract?
Only once the change order is approved, or if the contract lets you bill T&M as it happens. Check the subcontract for that language. Billing unapproved work is a common reason a pay app gets bounced.
Can I fix this without touching anything else?
You can try, and it doesn't hold. Step 06 depends on step 04, estimating system. Install it ahead of that and it produces numbers the field won't trust, which is worse than the problem you started with.
Wrote CONTROL, the 8 step system behind these figures. More about the author.