T&M Billing Best Practices for Electrical Subs

Time and Materials (T&M) billing is both an opportunity and a risk. Done well, it ensures you're compensated fairly for every hour worked. Done poorly, it creates disputes, delays payment, and leaves money on the table.

This guide covers the practices that help electrical contractors maximize T&M revenue while maintaining positive customer relationships.

Why T&M Billing Goes Wrong

Before diving into best practices, let's understand why contractors struggle with T&M:

1. Delayed time capture - Hours remembered days later are always underestimated
2. Vague documentation - "8 hours electrical work" doesn't help anyone
3. Missed categories - Drive time, material runs, and extras get forgotten
4. Billing lag - Waiting weeks to invoice means forgetting details and delaying payment
5. Unclear agreements - What's billable wasn't defined upfront

Every one of these problems is solvable with the right processes.

If you are following these practices and still losing margin, the problem may be deeper than process. Our post on how to stop losing money on T&M electrical jobs diagnoses the specific leaks -- setup time, drive time, quick favors -- that drain revenue even when billing practices are sound.

Best Practice #1: Define Billable Scope Upfront

Before starting any T&M work, document what's billable:

Standard Billable Items

• On-site labor (usually portal to portal or job site hours)
• Travel time (full, half, or none - specify)
• Material cost plus markup (define the markup percentage)
• Equipment/tool rental

Often Overlooked Billables

• Time waiting for access (GC delays, customer not ready)
• Material procurement trips
• Documentation and as-built time
• Safety meetings required by site

Create a Simple Agreement Template

T&M Billing Terms

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Labor: $XX/hour (portal to portal)

Travel: $XX/hour

Materials: Cost + 15%

Overtime: 1.5x after 8 hours/day or 40 hours/week

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Invoicing: Weekly, Net 30

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All time tracked daily and submitted with invoice.

Get this signed before work begins.

Best Practice #2: Capture Time Immediately

The golden rule of T&M billing: If you don't record it when it happens, you won't bill it.

The Problem with End-of-Day Tracking

When workers try to remember their day at 5 PM:

• Start times get rounded to convenient numbers
• Lunch breaks get estimated
• Drive time gets forgotten
• Quick tasks disappear entirely

Real-Time Tracking Works

With mobile time tracking:

• Clock in when you arrive at the job site
• Clock out when you leave
• Switch jobs when you move sites
• Notes are added while details are fresh

Even 15 minutes of lost time per worker per day adds up to thousands annually.

Best Practice #3: Categorize Time Properly

Not all hours are the same. Your time tracking should distinguish:

Category 1: Productive Labor

Direct work on the project - installing, wiring, troubleshooting. This is your core billable work.

Category 2: Travel Time

Driving between shop and job site, or between job sites. Some contracts pay full rate, some half, some nothing. Track it separately so you can bill correctly.

Category 3: Non-Productive (Billable)

Waiting for access, safety meetings, cleaning up after other trades. These are billable on most T&M contracts but should be tracked separately.

Category 4: Extra Work

Change orders, additional scope, owner requests. This should be captured immediately with good notes.

Category 5: Non-Billable

Breaks, personal time, punch list on fixed-price work. Track for your own records but don't bill.

Best Practice #4: Document Everything

Good documentation serves two purposes:

1. Justifies your invoice to the customer
2. Protects you in disputes

What to Document

For each day on a T&M job:

• Workers present and hours worked
• Description of work performed
• Materials used
• Any issues or delays (with causes)
• Photos of work in progress (especially for hidden work)

Make Documentation Easy

If documentation is a burden, it won't happen. Use:

• Voice-to-text notes on mobile devices
• Quick photo capture (phone cameras are fine)
• Pre-built templates for common work descriptions

Example Daily Log Entry

Date: January 15, 2026

Job: 123 Main St - Office Remodel

Workers: J. Smith (8 hrs), M. Garcia (8 hrs)

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Work Performed:

- Ran conduit for new cubicle partition circuits (40 LF EMT)

- Installed 4 quad receptacles per plan

- Coordinated with HVAC for ceiling access

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Materials: 40' EMT, 4 quad receptacles, misc fittings

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Notes: Waited 45 min AM for ceiling tile removal by GC's crew

Best Practice #5: Bill Promptly

Invoice timing matters more than most contractors realize.

Why Fast Billing Matters

1. Fresh details - You remember what happened last week, not last month
2. Faster payment - The billing clock starts when you invoice
3. Fewer disputes - Customer also remembers recent work
4. Better cash flow - Money in your account, not your receivables

Ideal Billing Cadence

For active T&M work: Weekly invoices

Invoice every Friday for that week's work. Include:

• Detailed time breakdown by worker and day
• Materials used (with receipts or cost documentation)
• Any equipment charges
• Running total for the project

Handle Disputes Immediately

If a customer questions hours or charges, address it the same week. Waiting creates uncertainty and damages the relationship.

Best Practice #6: Use Technology That Supports T&M

Your time tracking system should make T&M billing easier, not harder.

Essential Features for T&M

1. Job-based tracking - Time tied to specific customers/jobs
2. Category separation - Distinguish labor types
3. Real-time capture - Mobile clock in/out
4. Notes and photos - Easy documentation
5. Quick reporting - Generate billing backup with one click
6. QuickBooks integration - Time flows into invoices automatically

Red Flags in Time Tracking Tools

• Per-worker pricing that discourages complete tracking
• Complex setup that delays implementation
• No mobile app or clunky mobile experience
• Reports that don't match billing needs

Best Practice #7: Review Before Billing

Build a quick review step into your process:

Weekly Billing Review Checklist

• All workers have complete time entries for all days
• Time is categorized correctly (labor, travel, extra)
• Notes/documentation is adequate for billing backup
• Material costs are captured with receipts
• Any disputes from previous billing are resolved

Catch Missing Time

Compare time entries against job schedules. If workers were on site but have no time logged, follow up immediately.

The Payoff: Capturing Lost Revenue

Contractors who implement these practices consistently report:

• 5-15% increase in billed hours from better capture
• Faster payment cycles from prompt billing
• Fewer write-offs from disputes
• More accurate job costing for future estimates

For a mid-size contractor, this easily translates to $20,000-50,000 annually in recovered revenue.

Getting Started

You don't have to implement everything at once. Start with:

1. This week: Get time tracking in place (or fix what you have)
2. Next week: Establish daily review routine
3. This month: Move to weekly billing cycle
4. Ongoing: Refine categories and documentation

Each improvement builds on the last. Within a month, you'll have a T&M billing process that captures every billable hour. For a broader look at time tracking fundamentals, see our complete time tracking guide for electrical contractors.

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