T&M Contract Line: What It Is and How It Works in PSOhub

Published: 1 June 2026

Audience

Admin
Controller
Project Manager

Objective

Understand what a T&M (Time & Materials) contract line is, how it fits into PSOhub's contract structure, and how it controls budgeting, time tracking, and invoicing for variable-scope work.

Introduction

A T&M contract line is one of five contract line types available in PSOhub. It is used when the scope of work is variable and you want to invoice based on actual hours worked rather than a fixed agreed amount.

Unlike a Fixed Fee contract line, a T&M line has no pre-set invoice value. The amount invoiced grows as your team logs time against the line. This makes it well suited for ongoing engagements, support work, or any project where the effort is difficult to predict upfront.

Every contract line, including T&M, belongs to a Contract Group within a project. The group organizes related lines together and provides a subtotal view of budget usage.

How a T&M Contract Line Works

When time is booked against a T&M contract line, PSOhub calculates the value of those hours using the billing rate of the person who logged the time. This value is reflected in the Amount field, which updates automatically as new time entries are added.

There is no fixed amount to invoice. Instead, you invoice for what has actually been worked on. PSOhub tracks this in real time, giving you and your client full visibility into the value being accumulated.

Financial Fields on a T&M Contract Line

The financial information on a T&M contract line is displayed across four fields:

Field	Description	Types/Values	Notes
Amount	Automatically calculated by PSOhub based on the value of hours booked. This field cannot be edited manually and is used in the invoicing process.	Currency	Updates dynamically as time entries are logged or adjusted. This field is the primary driver for invoicing accuracy.
Budget (Sales)	The estimated value of work agreed with your client, based on your selling rate. You can enter this manually or populate it automatically using the Budget Grid.	Currency	Used for revenue forecasting and margin analysis. Ensure alignment with the agreed contract value to avoid discrepancies in reporting. Can differ from actuals (Amount) as the project progresses.
Budget (Costs)	The internal cost estimate based on your cost rate. You can enter this manually or populate it automatically using the Budget Grid.	Currency	Critical for profitability tracking. Keep this updated to reflect realistic internal costs
Total Value	The value used to calculate the Total Project Value. It reflects the current value in the Amount field.	Currency	This is a derived field and cannot be edited.

📌 Note: The value in the Amount field always equals the value shown in the Used column on the Contract tab of the project's financials.

Budget Alerts

You can set one or two budget alert thresholds on a T&M contract line. When the value of hours booked reaches the defined percentage of the budget, PSOhub triggers an alert.

Alerts appear in the Activity feed of the project. If a team member has alerts enabled in their profile, they will also receive a notification in PSOhub and by email.

The T&M icon on the contract line changes color to reflect alert status: it turns orange when the first alert threshold is reached, and red when the second threshold is reached. If only one alert is configured, the icon turns red when that threshold is reached.

Deactivating a Contract Line on Budget Overrun

In addition to alerts, you can enable the Deactivate the contract line on budget overrun option. When active, this prevents team members from logging time against the contract line once the budget has been fully consumed.

The Active toggle for the contract line only becomes available once the project status is set to Active. At that point, the line is automatically activated to allow time entries.

To prevent time from being booked against a contract line at any point, uncheck the Active toggle. The line will no longer appear as an option when logging time.

📌 Note: Deactivating a contract line does not affect time entries already booked against it.

Adding the Contract Line as a Task List

You can add a T&M contract line as a task list in your project's task board. This is useful when the contract line is not already included in a task board template, or when you are building the task board without a template.

This connects the work being tracked in your plan directly to the financial line it is billed against.

Invoicing a T&M Contract Line

The Invoicing tab on the contract line controls how and when PSOhub invoices the accumulated hours. You can choose to invoice manually or on a monthly basis.

If your organization uses an accounting integration, you can assign a specific tax category and GL account to the contract line. This overrides the default revenue account set in your organization settings.