How to tell if your contractor is overbilling
Not every uncomfortable invoice is dishonest. Here is how to check a payment request against the contract, the schedule of values and the work actually done.
An invoice arrives and it feels wrong, but you cannot say why. Before assuming the worst — most overbilling is not fraud, it is drift — there are four checks that will tell you what is actually happening.
1. Payments against the contract
Add up every payment you have made. Compare it to the current contract value: the original contract plus approved change orders. Express it as a percentage.
If you have paid 70% and the job is visibly 40% done, that is a conversation. If you have paid more than 100%, that is a serious conversation — and it happens more often than people imagine, usually through informal extras rather than deliberate overcharging.
2. Payments against progress
Most contracts have a schedule of values — the contract broken into line items with a value each. A payment request should say what percentage of each line is complete. Walk the job with that list. If drywall is billed at 90% and two rooms have no drywall, you have found something specific to ask about, which is far more productive than a general sense of unease.
3. Extras against paperwork
Take every line on the invoice that is not in the original contract. For each one, ask for the approved change order. If there is not one, you have found the gap — and it is worth resolving now rather than at the end when the number is bigger and the work is built.
In our experience the overage is almost never a padded line item. It is a series of genuine extras that everyone agreed to verbally and nobody papered, each reasonable on its own, adding up to a number nobody planned for.
4. Retainage
Most contracts hold back a retainage — commonly 5–10% — until the work is complete and the punch list is closed. Check it is actually being withheld. Retainage released early removes most of your leverage to get the last items finished, and it is easy to give away without noticing.
What to do with what you find
- Put it in writing, calmly and specifically. Line numbers and figures, not adjectives.
- Ask for the supporting documents rather than accusing: the change orders, the schedule of values, the lien waivers from subs.
- Do not stop paying entirely if the work is genuinely progressing — that escalates fast and rarely helps. Pay the undisputed part and hold the disputed part with a written explanation.
- If the gap is large or the answers do not come, this is the point to get a construction attorney or a professional owner's representative involved.
The prevention is boring and it works
Keep a running contract value that updates only when a change order is approved, keep every payment against it, and keep the punch list current. Then the answer to "have I overpaid?" is a number on a screen rather than an evening with a shoebox. That is precisely what the money side of Punchlist360 does.
Common questions
How do I know if I have paid my contractor too much?
Total your payments and compare them to the original contract plus approved change orders. Then compare that percentage to how complete the work visibly is.
What is retainage?
A percentage — commonly 5 to 10% — withheld from each payment until the work is complete and the punch list is closed. It is your main leverage for getting the last items finished.
Can I stop paying my contractor?
Withholding payment entirely is a serious step with legal consequences. Paying the undisputed portion and withholding the disputed part with a written explanation is usually the better-advised route — and worth taking advice on.
Keep all of this in one place
Punchlist360 is the punch list, the photographs, the budget and the insurance claim file for your build — so the record exists as a by-product of doing the work. $9.99 a month, cancel any time. Contractors you invite are free.
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Change orders: why unapproved extras cost homeowners the mostA change order is how the contract price changes. Get them in writing before the work happens and the final bill holds no surprises. Skip them and it will.
Draw schedules and progress payments, explainedHow construction payments are structured, what a schedule of values is, and how to check a draw request before you pay it.
What to check before you make the final paymentFinal payment is the last moment you have any leverage. Here is the checklist to work through before the money leaves.
Lien waivers: what to collect and whenYou can pay your contractor in full and still face a lien from a sub who was never paid. Lien waivers are how you stop that.