Time-and-Materials Invoice Verification: Checking T&M Tickets Before You Pay

Time-and-materials billing — sometimes called T&M, force account, or cost-plus work — is how construction prices work that cannot be defined precisely enough to bid as a lump sum. The contractor performs the work and bills the actual labor hours, equipment time, and material cost it consumed, plus an agreed markup. It is the right billing method for emergency repairs, undefined scope, owner-directed changes, and differing-site-conditions work. It is also the billing method with the weakest controls in the entire construction payment chain.

A lump-sum pay application reconciles against a schedule of values and a fixed contract sum — there is a ceiling, and there is a structure. A unit-price invoice reconciles quantities against measured field counts. A T&M invoice reconciles against nothing except the tickets the contractor itself prepared. If those tickets are wrong, inflated, or unverified, the invoice built from them is wrong, and there is no second document that catches it. The verification has to happen at the ticket level, day by day, or it does not happen at all. This post walks through how to do that.

When Work Is Billed Time-and-Materials

T&M is not a contract type a project chooses casually — it is what you fall back to when scope cannot be priced. Knowing why a given piece of work is on T&M tells you what the ticket should look like and what could go wrong.

Two of these deserve extra attention. Owner-directed changes billed T&M before a change order is signed can drift indefinitely if nobody converts them to a fixed price — open-ended T&M is the most expensive way to buy construction. And differing-site-conditions work is frequently the basis of a downstream claim, which means every ticket needs to be clean enough to survive an auditor reading it two years later.

Anatomy of a T&M Ticket

A T&M ticket — also called a daily ticket, work ticket, or force-account ticket — is the field record of what was spent on one day of T&M work. The invoice is just an addition of tickets plus markup. Everything that matters is on the ticket, and a T&M ticket has four distinct cost components, each verified differently.

A complete ticket also carries the date, the project and cost-code reference, a description of the work performed, and — critically — a signature from someone on the owner or general contractor side who was present and witnessed the work. The signature is what turns the ticket from a claim into a verified record. A ticket with no signature is just the contractor's word, and a stack of unsigned tickets is the single most common reason a T&M invoice gets disputed at closeout.

The Daily Ticket Sign-Off Discipline

The most important control on T&M work is not an AP control at all — it is a field discipline. T&M tickets must be reviewed and signed every day, by the superintendent or project manager who was on site, while the work is still fresh. Not at the end of the week. Not when the invoice arrives. The same day.

The reason is simple: nobody can verify after the fact whether the contractor really had six laborers on site three weeks ago, or whether the excavator ran four hours or eight. The only person who can confirm a T&M ticket is someone who watched the work, and their memory is reliable for about one day. Sign tickets daily and each is a contemporaneous, defensible record. Let them pile up and the invoice arrives as an unverifiable stack — at which point the choices are to pay it on faith or to pick a fight at closeout, and neither is good.

AP cannot enforce daily sign-off directly, but AP can refuse to process tickets that lack a same-day signature. When the field knows that unsigned tickets bounce, the discipline holds. When AP pays unsigned tickets to keep the contractor moving, the discipline collapses within a week and the project has lost its only real T&M control.

Verifying Labor Hours and Rates

Labor is usually the largest component of a T&M ticket and the easiest to inflate. Two things have to check out: the hours and the rate.

For hours, the named workers and their hours on the ticket should match the contractor's certified payroll or daily timesheet for that date. A worker billed for eight hours on a T&M ticket should appear on the payroll for eight hours that day on that project. Watch for the same worker billed on two tickets the same day totaling more than a full shift, workers who appear on the ticket but not on any timesheet, and crew sizes that exceed what the described work plausibly required. If the ticket says eight laborers hand-dug a trench two could have dug, the hours may all be real and the work still overstaffed — a conversation for the field, but AP should surface it.

For rates, the billable rate per classification should match a rate schedule attached to or referenced by the contract. T&M contracts almost always include an agreed labor rate schedule — apprentice, journeyman, foreman, operator, each at a stated hourly rate. The ticket rate should equal the schedule rate, not a number the contractor picked. Verify that overtime is billed at the contractually agreed overtime multiplier and only for hours that genuinely exceeded the straight-time threshold. And confirm that the rate is being applied to the right classification — billing a laborer's hours at a foreman's rate is a common and easy-to-miss overcharge.

Verifying Equipment and Material

Equipment billing has its own failure mode: the difference between operating hours and standby hours. A T&M ticket should bill equipment for the hours it was actually working, not for the hours it sat on site. An excavator that ran four hours and idled four hours is a four-hour charge, unless the contract specifically allows a reduced standby rate for idle time — and many do, at a fraction of the operating rate. Verify the equipment rate against the contract's equipment rate schedule, which commonly references a published source such as the rental rate blue book. Watch for equipment billed at full operating rate for a full day when the described work could not have kept it running all day, and for equipment on the ticket that has no role in the work described.

Material has the clearest paper trail, which makes missing paper least excusable. Every material line should be supported by a vendor invoice or delivery ticket, the quantity on the ticket should match the quantity delivered, and the unit cost should match the vendor invoice — T&M material is billed at the contractor's actual documented cost, then marked up, not at an estimated price. Two specific checks: confirm the material was consumed on the T&M work and not diverted to base-contract scope, and confirm the same delivery ticket is not also billed elsewhere. Material with no backup invoice should not be paid, full stop.

Markup and Burden — What's Allowed

Markup is where T&M invoices quietly leak money, because the rules are in the contract and the contract is rarely open on the AP desk. The markup percentage covers overhead and profit, and it is almost always different for each cost component — a typical structure might allow 15 percent on labor, 15 percent on material, and 10 percent on equipment and subcontractor cost. The invoice should apply each rate to the correct base. Applying the labor markup to the equipment total, or applying any markup twice, is a real and recurring overcharge.

Labor burden is the part that causes the most confusion. Burden — payroll taxes, workers' compensation insurance, fringe benefits — is a real cost of labor, and T&M contracts handle it one of two ways: either the agreed labor rate schedule is already fully burdened, meaning burden is baked into the hourly rate and cannot be billed again, or the contract bills a bare wage rate plus a separately stated burden percentage. The error to catch is double-dipping — billing a fully burdened rate from the schedule and then adding a burden line on top. Two more checks: markup on subcontracted T&M work is usually capped below the rate for the contractor's own forces, so confirm tiered sub work is not marked up at the prime rate; and small tools and consumables are often covered by the markup itself, so a box of drill bits does not get its own material line.

Reconciling Tickets to the Invoice

The T&M invoice is a summary document. The verification is in the tickets behind it, and the final step is confirming the invoice is an honest addition of those tickets — nothing more, nothing less.

That last item matters more than it looks. Most owner-directed T&M work is authorized with a not-to-exceed ceiling — a cap that says T&M is fine up to a stated dollar figure, beyond which the work needs re-authorization. AP should track the cumulative T&M billed against that ceiling on every invoice. Open-ended T&M with no running total is how a $15,000 exploratory scope becomes a $90,000 line item nobody decided to approve.

Done by hand, this reconciliation is slow — adding up labor hours across thirty tickets, checking each rate against a schedule, confirming no ticket number repeats from last month. It is exactly the kind of mechanical, high-volume cross-checking that AP automation handles well: a platform like Covinly can extract every ticket, total the components, flag rates that do not match the contract schedule, catch a ticket number billed twice, and track the running total against the not-to-exceed cap. The arithmetic becomes automatic, and the AP analyst's time goes to the judgment calls — like whether an eight-person crew fit the work described.

Bottom Line

Time-and-materials work has no schedule of values to reconcile against and no fixed price to cap the exposure — the only control is verifying the tickets, and the only time that verification is reliable is the day the work happens. Make daily sign-off a non-negotiable rule, check labor hours against payroll and rates against the contract schedule, bill equipment for operating hours and material at documented cost, apply markup and burden exactly as the contract specifies and never twice, and reconcile every ticket to the invoice with an eye on the not-to-exceed ceiling. T&M is the right billing method for undefined work. It is only a safe one when every ticket behind the invoice has been verified.