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A RocketLevel piece for restoration owners, project managers, estimators, and accounts receivable (AR), backed by decades of experience in the trade. About a 6-minute read.
Time and Materials (T&M) billing is one of the most useful tools in commercial restoration, because it lets you start a large loss immediately, before scope is fully defined. The building is flooded, the clock is running, and you cannot wait for a fixed estimate to be negotiated. T&M lets you mobilize now and account for the work as you go.
But T&M comes with a trap. It only gets paid if your rates were agreed before you started and your documentation is complete enough to justify every hour, every piece of equipment, and every material charge. When a desk adjuster or owner's representative reviews a T&M invoice, what they're really approving is the documentation file behind it. If the file is thin, the charges get cut, and the cuts come straight out of your margin.
The invoice only summarizes what the daily log proves.
The first failure point on T&M is rates that were never agreed. If you bill at numbers the payer never accepted, expect them to be cut to whatever the reviewer considers reasonable, after the work is already done.
Before mobilizing (or as early as humanly possible), get written agreement on:
| Rate | What to agree in writing |
|---|---|
| Labor rates by trade and role | Technician, lead, supervisor, and any specialty trades, with straight-time and any overtime or premium-time rates spelled out. |
| Equipment rates by unit per day | Air movers, dehumidifiers (low grain refrigerant, or LGR, and desiccant), air scrubbers, generators, and specialty gear, each at a daily rate. Equipment is often a large share of a restoration T&M bill and a frequent target for cuts. |
| Material markup | The agreed markup on materials and consumables over documented cost. |
| Markup on subcontractors | The markup on subcontractors and any other pass-through costs. |
Tie your rates to a recognizable basis where possible (a published equipment-rate reference, or your standard published rate sheet) so they are defensible rather than arbitrary. Agree the basis as well as the numbers: your work authorization and terms and conditions should state that T&M billing applies and on what terms, so the right to bill T&M is settled at the start. If the repair is funded by a federal award, through a public entity or a FEMA Public Assistance grant, the owner's procurement is bound by 2 CFR 200.318(j) and a T&M contract is allowed only "if the contract includes a ceiling price that the contractor exceeds at its own risk," so ask about federal funding while you are still setting rates. Written agreement up front removes one of the most common sources of T&M disputes.
Everything depends on contemporaneous, complete daily documentation. "Contemporaneous" matters: a log filled in at the time, on site, is far more defensible than one reconstructed from memory at billing.
Each day, on every T&M job, capture:
| Log item | What to capture |
|---|---|
| Labor by person and trade, with hours | Who was on site, in what role, for how many hours, doing what task. Tie hours to specific work activities, not just "8 hours on site." |
| Equipment on site by unit and by day | Exactly what equipment was running, how many units, and on which days. Photograph the equipment in place with date stamps. Equipment-day counts are where reviewers cut hardest, so prove every unit. |
| Materials with receipts | Every material and consumable used, with the supporting receipt or purchase record. Without a receipt, expect the charge to be cut. |
| Daily site conditions and progress | Moisture readings, psychrometric data, scope of work performed, photos before and after. This connects the hours and equipment to a documented reason they were necessary. |
| Sign-off where available | A daily or periodic sign-off from the owner's representative or property manager confirming the work and presence is powerful corroboration. |
When you bill, send a justification packet that lets the reviewer say yes without picking up the phone: