Reimbursable expenses (Open book/Time and Material

Time and Material and Open Book Are pretty much the same thing, in other words, we show the client our actual incurred costs and they see our agreed mark up unless we provide fixed hourly or day rates.

When Open Book/Time and Material is used: when the amount we will spend on something is unknown before the purchase. The intent is that we will make a purchase or conduct work and then provide the receipt/invoice to the client to then reimburse us. This is very rarely used any mainly only used for time and material scopes of work or when paying for permit fees, printing fees etc. Some projects may be all open book and some may be a combination of both (i.e main contract is fixed cost, but a specific change order may be open book/time and material)

This process is only to be done when needed, however, when possible all costs should always be established, and approved by the client before purchasing and/or paid in advance when possible such as finish materials, larger permit fee amounts, engineering or sub-consultant fees, etc.

EXAMPLES

Time and Material Example 1: A client needs some rot repaired in the middle of a project for flooring, but we do not know the exact amount of materials and labor required.

What Do you do?

  • Develop a change order (depending on if this is a new project or an ongoing project) Including the following:

    • Scope of work.

    • The rates of labor per hour per person

    • Stating that we will be purchasing material as needed to be reimbursed by the client at the time of billing.

  • Receive approval on the change order.

  • Prior to Conducting work create a separate change order where all the project receipts can be added to and where all labor can be tracked and add “T&M” in the Title. i.e.“Floor Repairs T and M”

  • For tracking labor hours, create a line item in the change order and update hours daily

  • When Uploading Receipts, add to cost inbox and Tag the receipt as “time and material”

  • At the end of the week when receipts are reviewed add all applicable receipts to the applicable change order and create line items for each receipt within the change order.

  • Convert Receipt to Bill (See expense tracking section on how to do this)

  • VERY IMPORTANT MAKE SURE TO MARK BILL AS A TIME AND MATERIAL VARIANCE AND REFERENCE THE CHANGE ORDER

  • In the comment section of the Bill mention what change order title the receipt was added to.

  • Mark as paid if paid already and Send to QuickBooks

  • Mark Receipt in Cost inbox as complete Once bill is successfully created

  • Every week Admin will check bills comment section and reference the change order mentioned to make sure the expense was added to the change order