Time and Materials Controls Playbook

T&M is not inherently bad. Uncontrolled T&M is expensive.

This playbook installs a beginner-safe control system to:

prevent budget surprises
enforce rate card rules
detect scope creep early
install weekly visibility and escalation thresholds

What you will produce

Weekly burn review cadence (15 to 30 minutes)
Timesheet and evidence requirements
Rate card enforcement rules
Escalation thresholds (yellow/red)
A simple burn tracker and status report template

Beginner-safe definitions

Burn: How fast you are spending.
Run rate: Spend per week or per month.
Rate card: Approved hourly rates by role or seniority.
NTE: Not-to-exceed budget cap.

The control model (simple)

Every week you should know:

hours billed vs hours planned
spend to date vs budget
forecast to completion (if you have remaining work estimate)
what changed since last week
whether a change order is needed now

Step-by-step playbook

Step 1: Require weekly status reporting (non-negotiable)

For any material T&M engagement:

weekly status report
weekly hours summary by role
risks and blockers
forecast next week hours

If you do not ask for this, you will find out about overruns from the invoice.

Step 2: Install timesheet evidence rules

Minimum expectations:

every time entry has a task description
time is mapped to a deliverable or workstream
hours above a threshold require approval (example: more than 8 hours per day or more than 40 hours per week per person)

Disallow:

vague descriptions like "project work"
bulk entries that cannot be audited

Step 3: Enforce the rate card

You need three rules:

any billed rate must match the rate card or be explicitly approved
substitution of senior resources requires approval
new roles cannot be added without written approval

Most T&M leakage is seniority creep.

Step 4: Set escalation thresholds (simple traffic light)

Pick a threshold you will actually act on.

Example:

Yellow: forecasted spend exceeds budget by 5 percent
Red: forecasted spend exceeds budget by 10 percent or budget remaining < 15 percent with significant work remaining

Yellow means:

review scope and prioritize
tighten hours
prepare change order discussion

Red means:

stop and re-scope
require a change order or reduce scope
do not approve additional hours without explicit approval

Step 5: Install an approval rule for overruns

Decide who can approve:

additional hours
additional roles
change orders

Do not let approvals happen informally.

Step 6: Control pass-through expenses (tie to kit)

If the engagement includes travel or expenses:

require pre-approval
receipts required
no markups unless explicitly agreed

Use:

Step 7: Use an overrun estimator to create evidence early

Use:

It gives you a clean memo:

effective rate
budget remaining
forecast overrun (if remaining work estimate exists)
escalation recommendation

Templates

A) Weekly status report (copy and paste)

Copyable template (TEXT)
Weekly T&M Status Report

Vendor:
Project:
Week ending:
Business owner:
Delivery owner:

Progress
- Completed this week:
- Planned next week:

Hours and spend
- Hours billed this week (by role):
- Total spend this week:
- Spend to date:
- Budget (NTE):
- Budget remaining:

Risks
- Scope changes since last week:
- Blockers and dependencies:
- Overrun risk (green/yellow/red) and why:

Decisions needed
- Approvals requested:
- Change order required: yes/no (if yes, why)

B) Burn tracker (CSV starter)

Copyable template (CSV)
week_ending,hours_billed,spend_this_week,spend_to_date,budget_nte,budget_remaining,forecast_total,overrun_amount,risk_level,notes
2026-02-07,120,18000,54000,100000,46000,98000,0,green,On plan

C) Vendor email to tighten control (copy and paste)

Copyable template (TEXT)
Subject: T&M Controls and Weekly Reporting Requirements for [Project]

Hi [Vendor PM],

To ensure the engagement stays on plan, we are implementing weekly controls:

1) Weekly status report (progress, hours by role, spend to date, forecast).
2) Timesheet evidence requirements (task-level descriptions).
3) Rate card enforcement (no role or seniority changes without approval).
4) Escalation thresholds (we will require a change order if forecast exceeds budget).

Please confirm you can comply starting this week.

Thanks,
[Name]

Common pitfalls (avoid)

accepting invoices without weekly reporting
allowing seniority creep without approval
approving hours without tying them to deliverables
reacting after budget is already consumed