Last updated November 6, 2026
General information, not tax or legal advice. The rules depend on your country and your situation, so check anything with a tax or legal consequence with your accountant.
To track time and materials for client billing, open a job sheet for each job, record labour by person and day, record each material with its cost and selling price, and keep the receipts against the job. At billing time, add labour and materials together. An app only helps if it captures both on site.
What does a time and materials job sheet look like?
A time and materials job sheet has two tables, one for labour and one for materials, under the same job number. Here's an invented example: a heating firm replacing a boiler on a time and materials contract, with labour at €55 an hour for a fitter and €30 for an apprentice.
Labour, job 2026-118
| Date | Person | Work | Hours | Rate | Net |
|---|---|---|---|---|---|
| 3 March | Fitter | Strip out, first fix | 7.5 | €55 | €412.50 |
| 4 March | Fitter | Pipework | 8.0 | €55 | €440.00 |
| 4 March | Apprentice | Pipework | 8.0 | €30 | €240.00 |
| 5 March | Fitter | Commissioning | 4.5 | €55 | €247.50 |
| Labour total | 28.0 | €1,340.00 |
Materials, job 2026-118
| Item | Source | Qty | Cost each | Markup | Sell each | Net |
|---|---|---|---|---|---|---|
| Radiator valve | Receipt 1182 | 6 | €14.00 | 20% | €16.80 | €100.80 |
| 22 mm copper pipe, per metre | Receipt 1182 | 18 | €6.50 | 20% | €7.80 | €140.40 |
| Boiler | Supplier invoice 5521 | 1 | €1,150.00 | 10% | €1,265.00 | €1,265.00 |
| Materials total | €1,506.20 |
The materials cost €1,351.00 and sell for €1,506.20. The job comes together like this:
| Amount | |
|---|---|
| Labour | €1,340.00 |
| Materials | €1,506.20 |
| Net | €2,846.20 |
| VAT at 20% | €569.24 |
| Total due | €3,415.44 |
The Source column is the one that gets skipped. It costs nothing to fill in on the day, and it lets you answer "what's this €140?" in a minute rather than an afternoon. For the labour side on its own, the guide to turning billable hours into an invoice goes further.
How do you stop materials going missing from the bill?
Materials go missing from the bill between the merchant's counter and the office, so stop it by capturing them there. Labour tends to get recorded, because someone remembers the day they worked. A €14 valve is forgotten by Friday.
- Put the job number on the purchase. Give it to the merchant so it prints on the receipt or the account invoice.
- Photograph every receipt the same day. Name the file with the job number. A shared folder per job is enough to start with.
- Log van stock when you use it. It has no receipt, so a note is the only record. Use a fixed price list for common items.
- Close the job with a walk-through. Before you invoice, ask whoever did the work what else went in. Take off anything that went back to the merchant.
Can you charge a markup on materials?
You can charge a markup on materials if the customer has agreed to it, and the place to agree it is the quote. A clause like this also sets the cap:
Labour is charged at €55 an hour for a fitter and €30 an hour for an apprentice, recorded per person per day. Materials are charged at cost plus 20%, or cost plus 10% on any item over €500, and receipts are available on request. We will not exceed €3,500 plus VAT without your written agreement.
Two things catch people out. A 20% markup isn't a 20% margin: a €100 item sold at €120 leaves €20 on €120, which is 16.7%. And if you told the customer "at cost", a trade discount you keep is hard to defend, so "cost" should mean what you actually paid.
How does VAT apply to materials on a time and materials job?
VAT usually applies to materials on a time and materials job at their full selling price, because they're part of what you supply. The EU VAT Directive includes incidental expenses you charge to the customer in the taxable amount (Article 78). It leaves out amounts repaid for spending done in the customer's name and on their behalf (Article 79), which is a true disbursement, and rarely what happens when you buy a valve on your own account.
The rate depends on your country and your work, and some construction services carry reduced rates or a reverse charge, so check locally. The guides to VAT on reimbursable expenses and disbursements and invoicing reimbursable expenses go through the distinction.
What should a time and materials app do?
A time and materials app should capture labour and materials at the job, and turn them into invoice lines without retyping. A spreadsheet and a folder of photos can serve one or two vans. Look for an app once hours arrive late or receipts go missing, and test these on a real job during the trial:
| It should | Why | How to test it |
|---|---|---|
| Record hours per person per job from a phone | Hours logged at the van are right. Hours logged on Friday aren't | Log a job on site, with poor signal |
| File a receipt photo against the job | Materials get lost between the merchant and the office | File three, then find them from the job a week later |
| Hold a cost and a selling price per material | You need both for the bill and for your margin | Add a part at 20% markup and check the sum |
| Turn the job sheet into invoice lines | Retyping is where errors start | Invoice a test job and compare it line by line |
| Export everything | You'll want the data for your accountant, or if you leave | Export a job and open the file |
Invoicing a time and materials job in ERPFlow
ERPFlow isn't a time and materials tracking app. It doesn't have a timer or timesheets today. Time tracking, including converting tracked time into invoices, is coming soon. It also has no job sheets and no on-site capture, and expenses don't link to customers or jobs, so there's no cost or margin per job. Keep the job sheet somewhere else.
ERPFlow comes in at the invoice, which suits home services and field services firms that already have their totals:
- Labour: a service with its unit set to hours and a price. On the invoice, pick it and type the hours as the quantity.
- Materials: a product carries a price and a stock level, and can sit on the same invoice as the labour. Each line is quantity times price, with an optional discount % and its own tax rate. Creating an invoice with a product line takes that quantity off stock.
- Your costs: expenses record what you paid with a category, supplier and VAT, and you can attach the receipt. They give you totals by period and supplier, never per job.