Understanding the Terminology Confusion in Variable Cost Construction Work

In the construction industry, contractors and clients often use different terms to describe the same type of work arrangement. Whether you call it daywork, do-and-charge, time and materials (T&M), cost plus, hourly work, or rates-based billing, these terms all refer to a similar approach: work that’s charged based on the actual time spent, equipment emlpoyed, and materials used, rather than a fixed price agreed upon beforehand.

At Dayworkbook, we’ve found that this terminology confusion often leads to inefficiencies in process management. Many contractors are performing what’s technically “daywork” but don’t realise there are industry-standard methods and digital solutions available to streamline these processes. This article clarifies these different terms and explains how our digital solution addresses the common challenges regardless of what you call this type of work.

Same Process, Different Names: Decoding the Terminology

Let’s clarify what these different terms mean and how they relate to each other:

Daywork

The Common Challenges - Regardless of What You Call It

The term “daywork” is widely used in the UK, Australia, and many Commonwealth countries. According to RICS (Royal Institution of Chartered Surveyors), daywork is:

“The method of valuing work on the basis of the time spent by the contractor’s team, the materials used and the plant employed.“

Daywork is typically used for:

• Variations to contract work
• Work where scope is not fully defined
• Unforeseen conditions requiring additional effort
• Activities that can’t be easily measured or quantified beforehand

Time and Materials (T&M)

Time and Materials, or T&M, is commonly used in North America and describes:

A contract where the client agrees to pay the contractor based on:

• The time spent by workers at agreed hourly rates
• The cost of materials plus a markup
• Equipment usage at predetermined rates

T&M contracts are structurally identical to daywork arrangements but use different terminology.

Cost Plus

Cost Plus refers to:

A contract where the client pays for:

• All direct costs incurred (labor, materials, equipment)
• Plus an agreed percentage or fixed fee to cover overhead and profit

Cost Plus arrangements follow the same core principle as daywork, and are often used on those projects under design development, that carry high risk, and/or are highly intricate. Often a subcontractor will use all-inclusive rates for its work, and the builder will add a percentage markup to these costs and pass onto its client. In some instances a subcontractor may also be asked to claim its actual costs plus a percentage mark-up instead of all-inclusive rates.

Do-and-Charge

Do-and-Charge is a more colloquial term that describes:

Work performed with billing based on:

• Actual hours worked
• Materials consumed
• Equipment utilised
• With appropriate markups applied afterward

This term is often used informally by contractors for small variations, for additional work outside the main contract scope, or on small scale projects for the sake of simplicity.

Hourly Work / Rates-Based Billing

Some contractors refer to this type of work as hourly work or rates-based billing, where:

Compensation is calculated using:

• Pre-agreed hourly rates for different labor categories
• Equipment rates per hour/day
• Actual cost of materials plus markup

Despite the terminology differences, contractors face the same challenges with all these work arrangements:

1. Documentation Burden: Capturing detailed records of time, materials, and equipment
2. Delayed Approvals: Getting client sign-off on completed work
3. Inefficient Reporting: Compiling information for billing purposes
4. Verification Issues: Proving work was completed as claimed
5. Communication Gaps: Ensuring all parties understand what work was done and why
6. Administrative Overhead: Managing paperwork and forms
7. Compliance Concerns: Meeting contractual and regulatory requirements

How Dayworkbook Addresses These Challenges

Our digital solution tackles these universal challenges regardless of which term you use for this type of work:

1. Streamlined Documentation Process

Dayworkbook provides a structured digital approach to capturing all essential information:

• Labour Records: Easily document who worked, their role, hours, and applicable rates
• Materials Tracking: Record quantities, descriptions, costs, and any markups
• Equipment Usage: Track plant and equipment by type, duration, and rate
• Activity Description: Clearly explain what work was performed and why
• Photo Evidence: Attach images directly within the system for visual verification
• Digital Signatures: Secure on-site authorisation from all parties

2. Simplified Client Approval

Our platform transforms the traditionally cumbersome approval process:

• Real-Time Sharing: Instant transmission to clients upon completion
• Notification System: Alerts clients when documentation requires review
• Mobile Approval: Clients can review and approve from anywhere
• Comment Functionality: Easy communication for clarifications or questions
• Audit Trails: Complete records of who approved what and when

3. Automated Reporting

Dayworkbook eliminates the headaches of manual reporting:

• Summary Generation: Automatically compile multiple records into client-ready reports
• Cost Tracking (Coming Soon): Analyse expenditures across categories, projects, or time periods
• Export Functionality (Coming Soon): Seamless integration with accounting and project management systems
• Digital Record-Keeping: Secure, searchable archives of all documentation

Terminology Shouldn't Matter - The Process Should

While industry terminology varies by region and company, the fundamental need remains the same: a systematic approach to documenting, approving, and reporting variable-cost construction work.

Dayworkbook was designed to accommodate all these terminology variations while focusing on the core process. Whether your contract calls it daywork, T&M, cost plus, or do-and-charge, our platform provides:

1. Consistent Process: Maintain standardised documentation regardless of what you call it
2. Industry Compliance: Align with RICS and other best practice industry guidance standards
3. Universal Application: Use for any variable-cost work arrangement

Real-World Applications: When to Use Dayworkbook

Our solution is ideal for various scenarios across all construction sectors:

New Construction

• Variations to the original scope
• Additional works requested by the client
• Unforeseen site conditions requiring extra effort
• Cost-plus work

Maintenance and Repairs

• Emergency callouts with undefined scope
• Investigative work to determine issues
• Repairs where extent isn’t known until work begins

Renovation Projects

• Discoveries behind walls or under floors
• Client-requested changes during the project
• Heritage building unknowns and surprises

Commercial Construction

• Design development changes
• Fast-tracked projects with evolving requirements
• Construction management contracts

Focus on the Process, Not the Term

Whether you call it daywork, time and materials, cost plus, or do-and-charge, the fundamental process remains the same. What matters is having an efficient, transparent system to document, approve, and report on the work performed.

Dayworkbook provides exactly that – a standardised digital solution that adapts to your terminology preferences while maintaining consistency in the underlying process. By focusing on the process rather than the term, contractors can improve efficiency, enhance client satisfaction, and ensure fair compensation for work performed.

Don’t let terminology confusion hold you back from implementing a solution that works for all variable-cost construction activities.