How to Track T&M Hours on Electrical Jobs in QuickBooks (Without Losing Money)

Time-and-material contracts should be the easiest money in electrical work — the customer pays for every hour and every part. Yet most electrical contractors leave 8-12% of billable T&M hours untracked, according to a 2023 FMI study on construction labor productivity. On a $200,000 T&M job, that is $16,000-$24,000 walking out the door.

The problem is not the contract. It is the gap between the field and QuickBooks.

Why Do Electrical Contractors Lose Money on T&M Jobs?

Electrical contractors lose money on T&M jobs because field crews track hours on paper or memory, creating a 24-72 hour delay before data reaches QuickBooks.

That delay is where revenue disappears. A journeyman who spends 45 minutes troubleshooting a panel issue before starting the scheduled work rarely writes down that 45 minutes. A helper who runs conduit for two different jobs in one day guesses the split. An apprentice who stays 20 minutes late to finish a rough-in just clocks out and goes home.

Multiply these micro-losses across a 15-person crew and five active T&M jobs. At $75/hour average billing rate, losing just 30 minutes per worker per day costs $37,500 per month. That is not a rounding error — it is a truck payment.

How Do You Set Up T&M Time Tracking in QuickBooks Online?

Set up T&M tracking in QuickBooks Online by enabling time tracking in Settings, creating service items with billing rates, and linking each job as a project or sub-customer.

Here is the step-by-step process:

1. Enable time tracking: Go to Settings, then Account and Settings, then Advanced, then Time tracking. Turn on Add Service field to timesheets and Make Single-Time Activity Billable.
2. Create service items: Under Products and Services, create items like Journeyman Labor, Apprentice Labor, and Foreman Labor with their respective billing rates.
3. Set up jobs as projects: Each T&M job becomes a Project (Plus/Advanced) or a sub-customer (Simple Start/Essentials). This lets you track hours against specific jobs.
4. Assign employees: Add each electrician as an employee or contractor so they appear in timesheet dropdowns.

The catch: QuickBooks Online built-in time tracking requires someone to manually enter hours at a computer. There is no mobile clock-in for field crews — which is exactly where T&M hours get lost.

What Is the Best Way to Capture Field Hours for T&M Billing?

The best way to capture T&M field hours is a mobile app that lets electricians clock into specific jobs from the jobsite, eliminating the paper-to-computer delay entirely.

Three approaches, ranked by accuracy:

Method

Accuracy

Delay

Cost

Paper timesheets then manual QB entry	82-88%	1-3 days	Free (but expensive in lost hours)
QuickBooks Time (TSheets) mobile app	90-94%	Same day	$20/mo + $8/user
FieldTimesheet with automatic QB sync	95-99%	Real-time	$99/mo + $8/worker

Paper timesheets are the worst option for T&M because you are billing the customer for actual hours — every unrecorded minute is unbilled revenue. QuickBooks Time improves accuracy but still requires workers to remember to switch jobs when they move between tasks. FieldTimesheet was built specifically for this problem. Electricians tap one button to clock into a job. When they switch jobsites, they clock out and clock into the next job. Every minute is captured, GPS-stamped, and synced to QuickBooks as a TimeActivity — ready for T&M invoicing.

How Do You Create T&M Invoices From Tracked Hours in QuickBooks?

Create T&M invoices in QuickBooks by opening the customer project, selecting unbilled time entries, and adding them to a new invoice with one click.

Here is the workflow:

1. Go to Sales, then Invoices, then Create Invoice
2. Select the customer/project for your T&M job
3. QuickBooks shows a banner: This customer has unbilled charges. Click Add
4. Select the time entries you want to bill (filter by date range for weekly billing)
5. QuickBooks pulls in the service item, hours, rate, and calculates the total
6. Add material line items manually or from purchase orders
7. Review and send

The key to clean T&M invoicing is consistent time entry. If your electricians log hours against the right job with the right service item every day, invoicing takes five minutes. If they do not, you spend Friday afternoon playing detective — calling foremen, checking schedules, and guessing allocations.

What Reports Should You Run to Monitor T&M Job Profitability?

Run the Time by Job Detail, Profit and Loss by Customer, and Unbilled Charges reports weekly to catch T&M tracking gaps before they become invoice disputes.

Time by Job Detail (Reports, then Jobs Time and Mileage, then Time by Job Detail): Shows every hour logged against each T&M job. Sort by employee to spot who consistently under-reports. If your foreman logged 9 hours but three helpers on the same job only logged 6, someone forgot to track the last hour of cleanup. Profit and Loss by Customer: Run this monthly for each T&M job. Compare actual labor revenue against estimated labor hours times billing rate. If the P&L shows you billed $15,000 in labor but estimated 250 hours at $75/hour ($18,750), you left $3,750 on the table. Unbilled Charges: This is your money-on-the-table report. Run it weekly. Any time entry sitting in unbilled status for more than 7 days is revenue you are at risk of never collecting. Most T&M contracts have billing windows — miss them and the customer may dispute the charges.

How Do You Handle Change Orders on T&M Electrical Jobs?

Handle T&M change orders by creating a new service item or sub-project in QuickBooks for each change order, keeping original scope hours separate from added work.

Change orders are where T&M tracking discipline pays off. When the GC calls and says while you are here, can you add three outlets in the break room — that is a change order. If your electrician tracks those hours under the original job scope, you will either under-bill (absorbing the extra work) or create a billing dispute.

Best practice:

• Create a sub-customer or separate project for each change order (e.g., Smith Office TI - CO#1 Break Room)
• Have the electrician clock into the change order project when doing that work
• Bill change orders on separate invoices or clearly separated line items
• Reference the change order number on every time entry

This creates an audit trail that survives disputes. When the GC questions a line item three months later, you can pull up GPS-stamped time entries showing exactly who was on-site and when.

What Is the Biggest T&M Tracking Mistake Electrical Contractors Make?

The biggest T&M tracking mistake is batching time entry at the end of the week instead of capturing hours in real-time at the jobsite.

A University of Utah construction study found that time estimates made more than 24 hours after the work was performed had a 40% error margin. Think about what that means for a T&M job: a journeyman who worked 9.5 hours on Tuesday and tries to remember that on Friday will write down either 8 or 10 hours.

The fix is not better timesheets or stricter policies. It is removing the delay. When an electrician clocks in on their phone at 7:02 AM and clocks out at 4:32 PM, you capture 9 hours and 30 minutes — not about 9 hours. Over a year, that precision on a 15-person crew is worth tens of thousands of dollars.

Can You Track T&M Hours for 1099 Subcontractors in QuickBooks?

Yes — enable contractor time tracking in QuickBooks under Settings, then Advanced, then Time Tracking, then toggle Show contractors to allow subs to log hours against your T&M jobs.

This matters for electrical contractors who use subs for specialty work (fire alarm, low voltage, generators). If you are billing the GC for all labor on a T&M basis, you need sub hours tracked with the same precision as your employees.

Two options:

1. QuickBooks native: Invite subs as contractors in QB. They can enter time via QuickBooks Workforce. Limited — no mobile clock-in, no GPS.
2. FieldTimesheet: Add subs as contractors in your account. They get the same mobile app, same one-tap clock-in, same GPS tracking. Their hours sync to QuickBooks as TimeActivities assigned to the right job. You bill the GC accurately and have documentation for 1099 prep.

Frequently Asked Questions

What is the difference between T&M and fixed-price for tracking purposes?

Fixed-price jobs need internal job costing to protect your margin. T&M jobs need accurate external billing — every untracked hour is lost revenue, not just eroded margin.

How often should I bill T&M hours to customers?

Bill weekly or biweekly. The longer you wait, the harder it is to defend individual line items. Weekly billing also improves cash flow and reduces the unbilled backlog.

Can QuickBooks handle different billing rates for different electricians?

Yes. Create separate service items (Journeyman Electrical at $85/hr, Apprentice Electrical at $45/hr) and assign the correct one when logging time. FieldTimesheet handles this automatically based on each worker role.

What if my electrician forgets to clock out?

FieldTimesheet sends an automatic reminder if a worker has been clocked in for over 12 hours. Admins can edit entries the same day. With paper timesheets, you might not catch the error until payroll.

How do I track materials alongside labor hours on T&M jobs?

Track materials in QuickBooks as expenses or bills assigned to the customer/project. When you create the T&M invoice, QuickBooks lets you add both unbilled time AND unbilled expenses in a single invoice.

Does GPS tracking on time entries help with T&M disputes?

Absolutely. GPS-stamped clock-in records prove your electrician was on-site during billed hours. This has resolved billing disputes for contractors who previously relied on paper timesheets with no location proof.

What is the minimum QuickBooks plan I need for T&M tracking?

QuickBooks Online Plus ($80/month) includes time tracking and projects. QuickBooks Simple Start and Essentials have limited time tracking without project-level reporting.

How does FieldTimesheet sync T&M hours to QuickBooks differently?

FieldTimesheet pushes each clock-in/clock-out as a TimeActivity via the QuickBooks API. Hours appear in your Unbilled Charges automatically — no manual entry, no CSV imports, no data re-keying.