What is Sage Intacct Time and Materials Billing?

Definition

Sage Intacct Time and Materials Billing is a project billing approach that charges customers according to the actual labor hours, services, materials, and reimbursable expenses associated with a project. Instead of invoicing a predetermined project price, the customer charge is calculated from approved billable activity and the applicable rates or amounts defined by the engagement.

This method is commonly used by consulting firms, professional services organizations, engineering companies, technology providers, contractors, and other businesses where project effort and material usage can vary during delivery. Accurate time capture, expense recording, billing rates, approvals, and invoice preparation are central to the process.

Table of Contents

How Time and Materials Billing Works

The core calculation is straightforward: Billable Amount = Billable Hours × Billing Rate + Billable Materials + Reimbursable Expenses. The exact components depend on the customer's contract and the project's billing configuration.

For example, suppose a consulting project records 80 approved billable hours at $175 per hour, $2,500 of billable materials, and $600 of reimbursable expenses. Labor billing is 80 × $175 = $14,000. The total invoiceable amount before applicable taxes or adjustments is therefore $17,100.

  • Billable time: Captures approved employee, contractor, or resource hours attributable to the customer project.
  • Billing rates: Applies the appropriate customer rate based on resource, role, activity, or contractual terms.
  • Materials: Records project-related materials or other chargeable items according to agreed pricing.
  • Expenses: Includes eligible travel, equipment, or other reimbursable project costs.
  • Invoice generation: Combines approved billable transactions into customer-facing invoices.

Time Tracking and Billing Data

Time And Materials Billing provides the conceptual foundation for charging customers based on actual project inputs. Customer Time Tracking supports the collection and organization of time spent on customer projects, making it possible to distinguish billable activity from non-billable internal work.

Time And Billing Software can connect time records, project assignments, billing rates, expenses, and invoicing workflows. This creates a consistent path from employee activity to customer charges and financial records.

For time-and-materials engagements, approvals are particularly important because invoice calculations depend on the underlying transactions. Finance and project managers can review hours, rates, expenses, and supporting project information before billable activity is included in customer invoices.

Invoice Processing and Financial Controls

Time-and-materials billing works best when invoice information is supported by structured validation. Relevant controls include customer identification, project coding, rate verification, time approval, expense eligibility, tax treatment, invoice dates, and accounting classification.

Invoice capture, extraction, validation, matching, GL coding, approval, posting, and straight-through processing are also important when project invoices enter broader finance workflows. The Invoice Software 2025: AI-Ready AP & Billing Guide. can provide additional context on invoice-processing technologies and how these capabilities support accurate financial workflows.

Tax validation should account for jurisdiction rules, nexus, exemptions, overcharges, VAT/GST requirements, and audit considerations. The applicable sales tax may depend on the customer's location, service classification, and other jurisdiction-specific factors, so the billing calculation and tax determination should be reviewed as related but distinct steps.

Connecting Billing With Procurement and Project Costs

Some time-and-materials projects include customer-reimbursable purchases. In these cases, procurement records can provide supporting evidence for material and expense charges. A purchase order workflow can improve visibility into requisitions, approvals, sourcing, procurement controls, and spend associated with project delivery.

Connecting project billing with procurement information helps finance teams trace reimbursable costs from the original purchasing activity through the project record and ultimately into the customer invoice. This supports clearer project profitability analysis and stronger financial documentation.

Receivables, Collections, and Cash Application

After time and materials invoices are issued, the process continues through accounts receivable. collections workflows can organize customer follow-ups, payment commitments, and dunning based on outstanding project invoices and contractual payment terms.

cash application helps match incoming customer payments with the correct invoices and maintain accurate receivable balances. Organizations can also use AR Automation Software to automate manual collection followups and matching of payments with invoices, supporting faster cash conversion and efficient reconciliation.

The Hyperbots Platform can support finance and accounting automation through document processing and ERP integration, while appropriate integrations can connect project management, ERP, billing, CRM, procurement, and payment systems.

Cash Flow and Sales-to-Cash Visibility

Because time-and-materials billing is based on actual project activity, timely time entry and invoice generation can improve cash flow forecasting, working capital planning, liquidity visibility, and treasury decisions. Finance teams can compare unbilled project activity with issued invoices and expected collections to understand upcoming receivables.

For organizations connecting commercial activity to invoicing, Sync Sales to Cash provides an educational framework for CRM and invoicing software, including how sales, billing, and accounts payable can work together to improve visibility across the revenue cycle.

Best Practices for Time and Materials Billing

  • Define billable categories: Establish which labor, materials, expenses, and other project transactions can be charged to customers.
  • Maintain accurate rates: Align employee, resource, activity, and project rates with approved contractual pricing.
  • Approve time promptly: Review customer project hours before billing periods close to support timely invoicing.
  • Document reimbursable costs: Retain appropriate project and procurement information for materials and expenses.
  • Review invoice calculations: Compare hours, rates, quantities, expenses, taxes, and contract terms before posting.
  • Connect receivables processes: Link invoicing with collections and payment application to maintain visibility from billing through cash receipt.

Summary

Sage Intacct Time and Materials Billing calculates customer charges from actual project labor, materials, and reimbursable expenses using approved quantities and applicable rates. Its effectiveness depends on accurate time tracking, project coding, rate management, expense controls, invoice validation, and coordinated receivables processes. When connected with procurement, accounting, collections, cash application, and ERP integrations, time-and-materials billing supports accurate invoicing, stronger cash visibility, and reliable project financial performance.