How to Prevent Revenue Loss With Digital T&M Tracking

Out-of-scope work can derail project budgets and timelines. Learn how contractors can track and manage extra work easily. This helps avoid revenue loss and ensures faster approvals. Digital T&M Tracking solutions make this possible.

The True Cost of Out-of-Scope Work in Construction

Out-of-scope work is an unavoidable reality in construction. Design changes, unexpected site conditions, or client requests can lead to extra work beyond the contract. This extra work can add significant costs. Contractors risk lost revenue, project disputes, and cash flow bottlenecks that can disrupt operations if not correctly tracked.

Many construction firms still use paper-based processes or old tracking methods. This leads to incomplete records, delays in approvals, and under-reported costs. To maintain profitability, contractors must proactively manage out-of-scope work with technology-driven solutions.

Why Traditional Construction Tracking Methods Fail

For many years, contractors have used manual documentation. This includes handwritten notes, spreadsheets, and verbal agreements to track extra work. While these methods may seem familiar, they come with serious drawbacks:

• Inconsistent Tracking: Paper logs get lost, and spreadsheets quickly become outdated.
• Approval Delays: Lack of real-time visibility slows approval from project managers or clients.
• Contractors struggle to justify and collect rightful payments when they don’t document extra work correctly.
• Disputes and Compliance Issues: Showing that extra work is valid can be hard without clear documents. This can lead to client disputes and legal problems.

When companies see the financial effects of untracked work, it is often too late to regain lost money. That’s why contractors need better systems in place.

The Shift to Digital T&M Tracking: A Competitive Advantage

Top contractors are shifting from old tracking methods when working with general contractors. They are now using software tools to capture, approve, and invoice extra work in real-time. With modern construction management solutions, firms gain:

• Instant Field-to-Office Communication: Foremen and field crews can take photos and write notes about extra work. This ensures quick visibility for approval.
• Automated Change Order Requests: Digital workflows streamline the process, reducing approval times and preventing revenue leakage.
• Accurate cost tracking happens when systems include out-of-scope work in project budgets. This helps prevent unbilled work.

Contractors can use technology to track their work. This helps them receive payment for extra hours and materials beyond the original plan.

St. Andrews Construction Faced Challenges Managing Labor Hours, Field Reporting, and Compliance on Complex Projects

By using Rhumbix, St. Andrews Construction made its workflows smoother. They improved real-time data capture and ensured accurate timekeeping. This led to fewer disputes and quicker approvals.

This case study highlights how digital transformation helped St. Andrews Construction enhance efficiency and profitability. Please read the full success story. It shows how Rhumbix helped their teams manage labor tracking and boost productivity.

Key Features to Look for Digital T&M Tracking Tools

When selecting a construction management solution, contractors should look for features that streamline the documentation and approval process:

• Mobile Field Reporting: A simple mobile app lets teams record extra work right away. They can add photos and descriptions for fast approval.
• Automated approval workflows enable digital approval chains to authorize work quickly, which helps avoid billing disputes later.
• Integration with Accounting Software like Spectrum or Sage 300 ensures that users seamlessly integrate approved workflows with invoices.
• Time & Material Logs: A detailed breakdown of labor and materials simplifies cost justification for faster client approval.

The ROI of Streamlined Out-of-Scope Work Management

Investing in technology to track and manage out-of-scope work isn’t just about efficiency but protecting profitability. Consider these benefits:

• Reduced Revenue Loss: Contractors can recoup thousands of dollars per project by ensuring all extra work is invoiced correctly.
• Faster Payments: With automated documentation, firms can submit change orders and get approvals faster, improving cash flow.
• Stronger Client Relationships: Clear documentation reduces disputes and builds trust with project owners and general contractors.
• Better Job Costing & Forecasting: Tracking extra work accurately helps contractors improve project estimates. This reduces financial risk on future jobs.

How Trade Contractors Can Take Action with Digital T&M Tracking

To take control of out-of-scope work, contractors should:

1. Audit Current Processes: Identify where breakdowns in tracking and approval occur.
2. Implement a Digital Solution: Invest in technology that enables real-time monitoring and documentation.
3. Train field teams to ensure foremen and crews can use digital tools effectively.
4. Standardize Workflows: Create consistent processes for reporting, approving, and invoicing extra work.
5. Monitor & Improve: Regularly review tracking data to optimize processes and improve recovery rates.

Conclusion

Out-of-scope work will happen, but we must avoid lost revenue. Contractors who embrace digital T&M work tracking solutions can streamline approvals, prevent revenue loss, and enhance profitability. The future of building efficiency depends on using technology designed for you.