Time-and-materials work, done cleanly

There is water on the first-floor ceiling under an upstairs bathroom, and nobody — not the homeowner, not you — knows whether that is a supply line, a wax ring, or forty square feet of subfloor. You cannot price it from the driveway. You can start in twenty minutes.

That is what time and materials is for. It is also where T&M goes wrong: the customer says yes to "we'll bill it hourly" while quietly picturing a number, and three weeks later your invoice and their picture are $2,000 apart.

The honest version and the lazy version

T&M fits when finding the problem is the work. Demolition that has not happened yet, a diagnostic call, a leak inside a wall, emergency response, restoration behind a mitigation crew, maintenance for a property manager who buys hours by the month.

The test is narrow: can you name what you do not know? "I don't know how much of the subfloor is soft until the tile comes up" is a real unknown, and T&M is the right answer. "I don't know how long a 200-square-foot deck takes" is not an unknown, it is a measurement you have not taken. If you have built that deck thirty times, T&M is you moving your own estimating risk onto the customer.

Fix-pricing the part you can see and running T&M on the part you cannot is legitimate too — as long as the estimate says which is which.

What goes in writing when the total does not

A T&M agreement has no final price, so every other number has to be nailed down. These are the terms that get argued about later, with the wording that settles them. Rates here are placeholders — use your own.

Markup percentages vary by trade and by what you are buying — a $9 box of fittings and a $2,200 water heater rarely carry the same number, and plenty of shops use a sliding scale rather than one percentage. Pick a method you can apply identically every time, write it down, and be able to show the receipt.

Rounding, travel and the hours nobody thinks to mention

This is where the surprise usually hides. Not the rate — the hours around the rate.

Quarter-hour increments are the common convention in the residential trades; some shops bill to the tenth of an hour, some to the nearest half hour. Any of them is fine. What is not fine is rounding only upward. If 3 hours 50 minutes becomes 4.0, then 4 hours 5 minutes has to become 4.0 as well, and you should be willing to say that out loud.

Then name the hours a customer does not expect to see:

• Travel. Billed, unbilled, or a flat trip charge — pick one and print it. "Portal-to-portal" means shop to site and back, and a customer who has never heard the phrase reads it on an invoice as padding.
• Supply runs. A mid-job parts run is real time on your clock. Say up front whether it is billable, and if it is, that one run bills to one job and not three.
• Crew size. Two workers for six hours is twelve billable hours. Write "per worker on site" or expect that conversation.
• Standby. Waiting on the owner's tile delivery is a cost. A reduced hold rate is easier to collect than a full billable day.

The not-to-exceed number is what gets it signed

An open hourly rate reads as a blank check. A ceiling on top of it reads as a price.

A not-to-exceed clause says you bill actual hours and actual materials, but stop at a stated figure and come back for written approval before passing it. The customer's worst case is known, and your risk is capped at "I have to send a change order" rather than "I eat the overage." A guaranteed maximum price is the same idea with more structure — a hard ceiling, usually with the contract spelling out what happens to savings if the job lands under it.

Set the number where you would actually want to have that conversation, not at your best case. A cap at your rosiest estimate means writing an approval request on day two of every job, which trains the customer to stop reading them.

Nothing legally requires a cap; contractors use one because it makes T&M signable. Some states push the same direction anyway — several require a residential home improvement contract to state a total price in dollars, which a purely open-ended agreement does not do. Check your state licensing board or consumer protection agency, or a construction attorney licensed where you work, before writing a residential T&M contract with no number on it at all.

One leak, three days, a total the customer already knew

Same ceiling. Lead at $95, helper at $55, materials at cost plus 15%, quarter-hour increments, cap at $3,800. The homeowner got the last column by text at the end of each day.

Labor $2,595.00, materials $474.73, haul-off at cost plus 10% $85.00. Final invoice $3,154.73 against a $3,800 cap, and the only new information on that invoice was the word "invoice."

Three habits do most of the work. Log the same day, not on Sunday from memory — date, hours per worker, what was done, materials with cost. Photograph the condition you found before you cover it. And send the running total on a fixed rhythm, daily on a fast job and weekly on a long one, so the customer watches the number climb instead of receiving it. Commercial and property-management work often requires a signed daily field ticket outright; on residential work it is just the cheapest dispute insurance available.

Invoicing weekly does more than smooth cash flow. It caps how far a misunderstanding can run before someone catches it, and it tells you in week one whether this customer pays.

Logging as you go so the invoice is old news

The reason T&M invoices get disputed is almost never the rate. It is that the log got written after the job instead of during it. In DoneQuote you keep your labor rates, markup method and T&M terms in the catalog once, then add hours and materials to the job from the phone while you are standing in the room — so the running total you send at the end of the day and the total you bill at the end of the week come from the same record, and the customer has already seen every line before it reaches an invoice.

The clean version of T&M is not a looser agreement than a fixed price. It is a tighter one, with the price left blank on purpose.