T&M tags track work that is not part of the base contract and necessary for future change orders that potentially will be paid to the subcontractor. The T&M paper process is ubiquitously slow and defined by inefficiency, delays, and uncertainty. Choosing digital time & materials will help with positive change and improvements that will benefit all stakeholders in the T&M process. 

If you are ready to migrate from a paper and PDF T&M, work with an expert that understands construction and your business needs. Your transition to digital is empowered by a greater awareness and adoption of API-enabled integrations, data standards, and integrated workflows, all driving a tighter approach for data management to identify, track, and resolve problems on projects.  

Map out your current T&M workflows and evaluate the value, costs, and ROI the T&M tracking software you are considering can deliver.

Customer time study: digital time & materials tracking

Here’s an example from a recent Rhumbix Customer Time Study. You can see the quantifiable benefits in the ROI Case Study.

Paper-based T&M tracking process

Elapsed time 60-90 days to complete the entire manual process. 

  1. Subcontractor writes T&M Tag or Ticket (5-to-10 min) 
  2. Subcontractor discusses with GC Supervisor for work authorization. Once OK’s, work begins. (5 min)
  3. Copy Scanned and Filed. (15 min) 
  4. Tag/Ticket is emailed (5 min)
  5. Tag/Ticket logged by Sub (5 min)
  6. Tag/Ticket logged by GC (5 min)
  7. As Tag/Ticket is worked, the Sub is logging Time, Material, Equipment used 
  8. Estimate Reviewed by GC Office 
  9. If rejected, GC notifies the subcontractor to resubmit. 
  10. If approved, GC notifies the subcontractor.
  11. Update Logbook 
  12. Subcontractor creates Change Order. 
  13. Initiate Change Order Process
  14. Assuming Approval from GC, Payment for Subcontractor
  15. Assuming Approval from Owner, Payment to GC
  16. End 

As you can see, the process is trodden with several approvals, transformations, data handoffs, and endpoints. All of which are workflow elements that are improved with well-designed automation, connected software. Today, it is possible to replace a troubled and high-risk manual T&M workflow.

Below is an example of the manual steps ELIMINATED with a digital T&M tracking platform:

Digital T&M tracking process for construction contractors

Eliminating manual steps for each T&M Tag can reduce the process substantially for each ticket.  

  • Copy Scanned and Filed. (15 min) 
  • Tag/Ticket is emailed (5 min)
  • Tag/Ticket logged by Sub (5 min)
  • Tag/Ticket logged by GC (5 min)

Building your digital T&M journey

While every contractor has a unique set of needs, constraints, and resources, the overall digital journey from paper and PDF to structured, integrated data remains the same—start small to go big. Properly defining the workflows that you are looking to transform and the data you need will help to determine the best path and solution to move forward with:

  1. Define the field data you need.
  2. Capture field data where it matters.
  3. Build workflows around data. 
  4. Gain insights from field-level data. 

Time & materials digital tracking platform benefits

  • Automating T&M collects data at the source, making it immediately available to connected software solutions (pay app, ERP, etc.) and workflows. 
  • Eliminate the need for T&M tags to be delivered from the field in spreadsheets or paper or added to PM software.
  • T&M software frees up admin time for documenting work for more important tasks
  • All backup documentation (photos, invoices, etc.) is digital, searchable, accessible from anywhere, anytime on any mobile device. 
  • Reduces risks of data being lost or delayed, improving reliability and timely processing as well as payment. 
  • Digitizing data at the source drives transparency among the contracting parties and greater awareness of project cost and contingency impacts. 
  • Creates optimal conditions for change order negotiation and timely and equitable compensation. 

In an age of digitized workflows, a T&M tracking solution will drive better revenue recovery on jobsites and improve the bottom line–this should be a focus for any construction company.

“By digitizing the T&M process, contractors can take steps to improve cash flow, margins, and the construction company’s financial health.”

Time and cost savings: digital T&M benefits for GC’s & subs 

Using mobile technology in the field to connect with the back office improves processes and saves time and money. This forward-thinking approach led construction firms to explore process improvements when they began recognizing the costs, headaches, and inefficiencies of paper-based T&M tracking on their jobsites. However, with so much invested in project management’s technological innovations, it becomes clear that the manual system of T&M tracking is not aligned with a core commitment to collaborative and transformative construction practices.

 

Leading GC and subcontractor transitioning to digital T&M tracking software saves time and money.

Before implementing a digital T&M tracking platform:

Number of Tickets Submitted   Time Required to Fill Out and

Distribute Ticket

Month-Per Project 25 Month-Per Project 30
Avg Number of Projects Open – Companywide 50 Month-Companywide 37500
Est. Number Per Month – Companywide 1250 Year-Companywide 450,000
Est.  Number Per Year – Companywide 15000    

Net: Time Spent Copying and Distributing paper-based T&M Tickets

  •       12.5 Hours Per Month/Project to Copy and Distribute Ticket
  •       150 Hours Per Year/Project
  •       7,500 Hours Per Year/Company

 

After implementing digital T&M tracking platform:

Implementing a digital T&M tracking solution for construction contractors

Minutes Recovered             Soft Dollar Savings

Average Monthly Labor 50% vs Manual Average $ Value of Labor 50% vs Manual
Per Minute/Per Ticket 15 Per Minute/Per Ticket $19
Per Minute/Per Project 375 Per Minute/Per Project $469
Per Minute/Company 18750 Per Minute/Company $23,438
Annual/Per-Minute/Company 225000 Annual/Per-Minute/Company $281,250

Additional benefits for contractors

While improved efficiency is important, the other advantages of a digital T&M tracking platform are what drives the value.

For a GENERAL CONTRACTOR, what is it worth to know outstanding T&M costs and put in forecasts for a Contractor?

Average Cost/Value Per Ticket – Project $5,000
Total Cost/Value for All Tickets in Month – Project $125,000
Total Cost/Value for All Tickets in Month – Companywide $6,250,000
Total Cost/Value for All Tickets in Year – Companywide $75,000,000

Companywide /Annual stats: Estimated tickets 1500 = 450,000 minutes required to fill out and distribute T&M tickets.

Benefits for General Contractors

  • Understanding of Hours / Cost Authorized Outside of Contract
  • Full Access to T&M Data Across All Projects / Subs
  • Improved Financial Forecasts
  • Better Visibility on Work Performed by Category
  • Assess Subcontractor Performance
  • Improved Efficiencies in Field (218%)
  • More Accurate Tickets the First TimeIncreased % of Cost Recovery on Work Outside Contract

For a SUBCONTRACTOR, what is it worth to improve “time to payment,” reduce the number of T&M tickets in dispute, and improve GC/SUB relations?  Does 50% savings sound worth it to transition to digital T&M Tracking software?

Average $ Value of Labor Soft Dollar Savings (50% of Manual) – Per Minute/Per Ticket $19
Average $ Value of Monthly Labor Soft Dollar Savings (50% of Manual) – Per Minute/Per Project $469
Average $ Value of Monthly Labor Soft Dollar Savings (50% of Manual) – Per Minute/Company $23,438
Average $ Value of Annual Labor Soft Dollar Savings (50% of Manual) – Per Minute/Company $281,250
   
Value of Monthly Disputed Tickets Paid Faster (based on 50% of Disputes Paid Faster) $781,250
Value of Annual Disputed Tickets Paid Faster (based on 50% of Disputes Paid Faster) $9,375,000

Companywide /Annual stats: Estimated tickets 15000; 450,000 minutes required to fill out and distribute tickets.

NOTE: The study also concluded a substantial reduction in the number of T&M Tags in dispute for the subcontractor. Evan, do we have a stat for this (slide 18 is confusing)?

Benefits for subcontractors

  • Increased % of Cost Recovery on Work Outside Contract
  • Improved Relationships with GCs
  • Improved Efficiencies in Field (76%)
  • Fewer Tickets Rejected
  • Use of Photos / Required Fields
  • Primary Reason for Rejection: Not Enough Detail
  • Faster Payments to Subs
  • Improved Working Capital

 

Conclusion

The benefits of transitioning to digital time & materials software are overwhelming from a workflow automation and financial benefit perspective. By focusing on T&M tracking software that instantly connects the field to the office eliminates the heavy burden of flawed field reporting and overwhelming financial, administrative resources. There is no better way to drive better cash flow and the financial health of your construction firm on every project.