Time & material extra work: how to bill every extra

Ask a contractor where the profit leaks on a job and the honest answer is often the same: the extra work that got done and never got billed. The owner's rep points at something not in the contract, the crew handles it, everyone nods — and three months later, at closeout, that work is a memory nobody can price and the owner has no reason to pay for. Time & material extras are real money the job earned. Whether you collect it comes down almost entirely to paperwork discipline in the moment.

This is a plain-English look at how T&M extra work is priced and billed, why the signed field ticket is the whole game, how markup actually works across labor, material, and equipment, and why "unbilled exposure" is the number that tells you how much money is sitting out on the job right now.

What T&M (and force account) actually means

When work outside the contract comes up and there's no time to negotiate a fixed price — or the scope is genuinely unknown until it's opened up — it's often done on a time & material basis: the contractor is paid for the actual labor hours, materials, and equipment used, plus an agreed markup. On public and heavy-civil work the same arrangement is often called force account. Either way, the deal is "do it now, track it carefully, bill the real cost plus markup."

T&M is the right tool for genuinely unknown or urgent work, but it flips the burden of proof onto you. On a lump-sum line, you get paid whether it took four hours or six. On T&M, you only get paid for what you can document — every hour, every material receipt, every piece of equipment, signed for at the time. Undocumented T&M isn't billable; it's a gift.

The signed field ticket is the whole game

The single document that decides whether extra work gets paid is the T&M ticket (or daily extra-work ticket / force-account ticket) — a record, made the day the work happens, of exactly what it took, signed on site by the owner's representative. Its job is to convert "we did some extra work" into "here is signed proof of the labor, material, and equipment, agreed to at the time."

A complete ticket captures:

• The what and why — a description of the extra work and what authorized it (a directive, an RFI answer, a field condition).
• Labor — workers, classifications, and hours, at your T&M labor rates.
• Material — quantities and costs, backed by receipts.
• Equipment — units and hours, at agreed rates.
• The signature — the owner's rep acknowledging the work and the resources, dated on site.

How markup works across the three buckets

T&M isn't billed at raw cost — you add a markup to cover overhead and profit, and the important detail is that the markup often differs by category. Many contracts (and most sensible agreements) allow a higher markup on labor than on material or equipment, because labor carries more of your supervision and risk. So a ticket typically works like this:

• Labor subtotal × its markup %,
• plus material subtotal × its markup %,
• plus equipment subtotal × its markup %,
• = the ticket total you bill.

Applying one blended markup to everything is how you either leave money on the table or overbill and invite a dispute. The rates and the allowable markups should come straight from your contract's T&M or change-order provisions — set them once, honestly, and price every ticket the same way.

From ticket to invoice: where the money slips

A signed ticket is necessary but not sufficient. The leak isn't usually a missing signature — it's the gap between a signed ticket and a billed one. Extra work tends to move through stages, and money gets stuck between them:

1. Pending — work done, ticket written, not yet signed/approved.
2. Approved — signed and authorized, but not yet on an invoice or change order.
3. Billed — invoiced to the owner (often rolled into a change order and the payment application).
4. Paid — the money's in.

The dangerous pile is Approved but not Billed. It's real, signed, collectible work — and every dollar of it is sitting on the job earning nothing, one forgotten cycle away from becoming un-collectible at closeout. That total has a name worth watching:

The discipline that collects it all

Billing every extra isn't complicated — it's a handful of habits held consistently, on days when there are ten more urgent things:

• Write the ticket the day the work happens. Not at week's end from memory. The details you lose are the dollars you lose.
• Get it signed on site. Every ticket, every time, before the crew leaves the area.
• Log it immediately with a status. A signed ticket in a truck is invisible. A logged ticket is money you're tracking.
• Work the unbilled-exposure list every billing cycle. Approved-not-billed is your collection queue — clear it before it ages.
• Tie extras to their change orders. Approved T&M usually needs to flow into a formal change order to be billed and to move your contract — where it also lands in your job cost as revised budget and revenue.

Every extra you do on time & material is work your crew already paid for in sweat. The only question is whether the paperwork lets you collect for it. Write the ticket, get the signature, log the status, and watch the unbilled number — and the money that used to evaporate between the field and the invoice stays yours.

This is general information about documenting and tracking time & material work, not a contract, a change order, or legal advice. T&M and force-account rates, allowable markups, authorization requirements, and notice provisions are set by your own agreement and vary by contract and jurisdiction — follow your contract and consult a qualified professional.