4 Common Slowdowns During Time-and-Materials Billing (and how we’re fixing them)

When time or uncertainty is a factor during construction, T&M can be your best approach to manage the work. This is especially true for situations of extra work, force account, or emergency declaration.

But processing and approving T&M bills can present its own set of challenges for the owner. Here are four common areas of frustration and how CostTrax works to solve them:

 

1. Pricing Negotiation & Validation

Pricing issues can slow things down both before and after the work has been done. On the front end, hours and days can be lost as parties debate over “reasonable” rates. On the back end, diligent owners must take on the time-consuming effort to collect and validate the backup provided.

How CostTrax is fixing it…
To tackle pricing issues, we had to examine each cost type independently.

• Owned Equipment: CostTrax is the only workflow software in the world to integrate hourly ownership & operating rates from the Rental Rate Blue Book. These rates are standard US DOT issued guidance for all FHWA projects. You’ll find them specified on more than 13,000 active contracts in the market. By integrating these industry-standard rates you can eliminate the need for both front-end negotiation and back-end validation.

• Rental Equipment: Rental is another area where CostTrax leverages EquipmentWatch data to speed the approval process. We automatically check invoiced rental rates against local advertised rates, so owners can sign-off with confidence.

• Labor: With the option to pre-load labor and hourly rates into CostTrax, everyone can stay on the same page regarding labor costs from day one.

• Materials: CostTrax allows users to upload digital copies of their invoice or receipt at the time of submission. This eliminates the time spent separately tracking down material backup.

 

2. Incomplete & Missing Information

During any type of cost-plus construction, the contractor is under a duty of itemizing each and every expenditure they make on the job. But owners often receive bills with too little detail (e.g. “loader” instead of “2018 Caterpillar 239D”) or missing details (e.g. a material expense without providing the invoice number). These situations force the owner to spend additional time chasing down the missing information.

How CostTrax is fixing it…
We provide contractors with a simple interface that breaks out all required information. Users can even pre-load their labor and equipment so that creating additional bills is fast and consistent.

As an added bonus, CostTrax leverages the EquipmentWatch database of over 22,000 construction models so that equipment details are standardized across all projects.

 

3. Communication Breakdown

One of the earliest problems we recognized when building CostTrax is the time-cost of working in silos. Multiple individuals from multiple organizations are involved in the steps that take T&M from tracking to final approval. Since there is no central platform to view approvals or changes, there is often confusion about the status of any given bill.

How CostTrax is fixing it…
This one had a simple answer: Put everyone in the same platform. Anyone assigned to the project – from any organization – can log in to view the status of a bill. We document all changes along the way for everyone to see. And CostTrax will even send emails to users to update status and nudge things along.

 

4. Applying Markup & Adjustments

To determine the correct reimbursement, owners must adjust rates and add markup that is consistent with their specifications. This effort is tedious and time-consuming. And mistakes can be costly – in fact one of the most common issues identified during public audits is simply the inconsistent application of these specs.

How CostTrax is fixing it…
This is the type of job that software automates with ease. Owners can set allowable costs, adjustments, and markup during initial project setup to ensure they are consistently applied to every bill.

By eliminating common slowdowns during time-and-materials construction, CostTrax can save agencies countless hours and wasted dollars. Request a product demonstration to find out how you can pilot CostTrax on your next project.