How to Detect Contractor Overbilling Errors

February 23, 2017
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Carefully watching costs can be time consuming. You may be tempted to pay invoices without really examining them, assuming that if you’re working with reputable vendors or contractors that you’ve worked with before, the charges are correct. But if you need to save time, do it elsewhere. Whether they’re accidental or intentional, mistakes are too often made on contractor invoices. To avoid being overbilled, look closely at contractor invoices.

When a contractor sends you an invoice that’s vague, it should be a red flag. Since the association is paying for the work, it should know exactly where that money went. And it’s not an unreasonable expectation. This usually happens in two ways.

Description of work. A contractor may send you an invoice with only a vague description of the work done. If you don’t know exactly what work was done, you won’t know if you’re being billed for the service you requested. You could be billed for work that you didn’t order, isn’t your responsibility, or wasn’t done at all. If you get a vague invoice, ask the contractor for another one that describes in detail the work that was done. The word “miscellaneous” in an invoice also is a red flag, and you should find out exactly what services and costs this category includes.

Hours and number of workers. Sometimes a contractor will bill you for labor costs at an hourly rate, and either charge you for more hours than it actually worked or for more employees per hour than actually worked on the job. If the number of hours you’re being charged for isn’t specified in the invoice, ask the contractor for this information. Then ask the contractor how many people worked on the project. If either number seems too high, ask the contractor to explain. If you still have questions about the number of people who actually worked on the project, ask your employees if they can recall how many of the contractor’s workers were on the job and when.

Don’t be afraid to ask the contractor for the details you feel you need to be confident that you’re not being taken advantage of. A good contractor should understand this and not be offended.