As good as the system is,billable hours efficiency has a lot of boobytraps.
What do you think about it?

can you explain in a little more detail what it is?

What it means is, if you are doing service work, then, if you do a 2 hour job, you need to charge a half day rate, if you anything over 4 hours you need to charge your day rate, if you charge by the hour you will continue to loose money, that can not be recovered.

well that's one side of the coin.
you don t have to charge 1/2 or full days ,as long as you charge what ever it takes to service the customer,do the job right and cover the expenses,make a profit etc.
however what happens to the electrician who is dispatched and not in charge of the type of calls,the driving distance,the quality of the calls etc etc?
what if you dispatched to jobs where the driving time already exceeds the time you will bill as billable hr?
what about the efficiency in this case?

At a minimum, we charge one-way driving-time (from a central point in case we happen to be an unusually far distance at the previous job).

With the recent gas-price hike, we're starting to get an extra $10 for the first hour, unless it's an all-day job, which covers driving time.

My ideal service call is 2 differet customers 5 minutes apart, half an hour each way, charge both round trip travel. Sears service are good at this minimum charge are a couple of other people I know in the service biz. I worked for a service compay that were experts in this, they had trucks out in each direction every day on some scheduled work and they picked up service. They could respond in good time. We had guys making 50 billable hrs in 40 on a regular basis.

[This message has been edited by sberry27 (edited 09-06-2005).]

At an employer in the past I was always doing service work where I was billed out at 12 hrs a day and more. Minimum charges need to happen or you will lose money. I don't like the idea of telling a customer I charge a minimum 2 or 3 hrs better to use a service charge figure your happy with and go that route.

...if you are doing service work, then, if you do a 2 hour job, you need to charge a half day rate, if you anything over 4 hours you need to charge your day rate...

I agree but I think this should kick in after a T&M job time runs beyond the 2 hours. For example, under 2 hours the customer pays the usual minimum service call charge (or trip charge or travel time) which covers the first hour then a per hour rate for the second hour. If the job takes longer than 2 hours the customer has bought a half day, more than 4 hours a full day.

Reason being that if you are on the job for say 6 hours, between travel time, lunch etc. the day is shot and the customer should be billed for it.

-Hal

well thanx 4 all the input
and of course we need to go where the work is.
the company i am with dispatches from home if possible to the nearest areas and is trying like that to keep the driving time down
long distances to jobs are sure efficiency killers and sometimes the drivetime only exceeds the revenue in billable time
so should there be a charge for that drive time or should the tech get some compensation for extended territory service and who is paying for it.
kinda hart to tell the customer ..as hard for the tech to eat it.
any suggestions?

Copper,

Does your company pay you all travel time?

Where I work I dont get paid until I arrive at the first job and my day ends when I leave the last job?

What do you mean "Eat it"

[This message has been edited by Zaney (edited 09-09-2005).]

zaney
The company i work for pays traveltime.
what i am trying to find out is if there might be some creative ways to bill the traveltime between jobs or to the first job,especially if the travel distance is very far.efficiency is the key right?
i know different companys have different approaches and maybe we can find a way to bill this time, without violating ethics.

I just think there might be are areas of opportunities to fix that and bill for that.
Just trying to find solutions by posting this


[This message has been edited by copperseller (edited 09-11-2005).]

One solution maybe to adjust the "what it takes" per task average to cover the additonal drive time.

Example: If you charge 10 minutes to install a receptacle you could add a few additonal minutes to each task to cover the additonal drive time.

good idea , raising the minutes is always good.
i like the minimum charge idea too.seems to have some potential there.
instead of a trip charge, maybe something like a "basicrate" or "starting rate" for which will be service performed as usually, same for the rates,as usually
instead of overcoming a tripcharge during the prequalifying i kinda get a "preapproval".conversion here i come
sure needs some fine tuning but i like the idea

There are a variety of ways to cover your expenses. It can be a game for some, but usually it comes down to:

1. First hour charges greater than your usual rate.

2. A Service or Travel Charge.

3. A Diagnostics Charge.

4. A Minimum Charge.

5. A combination of the above.

What we all want to avoid is that situation where you charge by the hour without these other charges. You have an hour round trip travel time, work on the job an hour, and you've just made half your rate. If you add in a free estimate or bidding time you might make a third of your rate.

Dave

I personaly do not think it is a clever tack to add minutes, if you happen to be charging T+M. Service charges and minimum charges are ok, the customer can take it or leave it, but I have had some customers who watch the clock like hawks. If I have told them there is a minimum 1 hr or some such, then thats the deal, regardless if I have only spent 45 min on the job. But, if I spent 45 minutes, charge em for an hour,and do not say so in front, I am going to hear some squaking from the clock watchers. Actually my state could label that as unfair and deceptive trade practices and spank me.

thnx for the post macmike
Adding minutes was sure referring to flatrating and not T&M.And as part of the breakeven calculation(which is essential not for flatraters only) it is sure legitimate to do so.The good point is, that adding those minutes will raise the price just a couple bucks, but by the end of the month it can mean several billable hrs more.If you get paid an incentive it will do you good.flatrate rocks


[This message has been edited by copperseller (edited 09-13-2005).]

For repair work we charge an extra half hour on each service call for travel time and pay the service tech an extra half hour's pay on each job.
(1/4 hour to get to each job and 1/4 hour to get back.)

In other words for the first 1/2 hour (or less) the customer is charge for one hour minimum.
After the first 1/2 hour we break it down by each additional quarter hour on the job.

It all averages out in the long run because the service tech might get paid 1/2 hour to get to his next job which is actually 5 minutes away or might be 45 minutes away.
Sometimes he can actually get 10 or more hours pay for an 8 hour day.

It works for us because we stay in a fairly small area and seldom drive very far.

Lately we have been adding $10.00 to each job or $10.00 per day on two day or more jobs for Gasoline.

Sparks, are you saying that you don't pay the techs 8 hours of pay for 8 hours of work? This sounds like you have a way to speed up a slow guy (like one I have).

Please tell me more, if you don't mind, and what happens if there's less than 8 hours worth of billables in a day? We're paying hourly, but not by the job, per se.

When it comes to traveltime i think us T&M guys make out better than the flat rating guys.We charge port to port and have no problem with




[This message has been edited by teraohm1 (edited 09-13-2005).]

by the way
is there a way to combine T&M with flatrating?


[This message has been edited by teraohm1 (edited 09-19-2005).]

tera
i have never really heard about it,but why combining it in the first place.
flatrating used in the right way will ensure priceprotection for the customers and does insure your income.
if you want to be really proffessional present the price before you do any work!
flatrate rocks.......

I do some work for a General Contractor that does mainly home remodels. He complanes because my invoices vary so much. I tell him you never know what you might run into when doing remodels. He wants a price list,but I will only charge T&M for
typeof work. So I may end up dropping his work. I have enough work and can make more dealing directly with the customer.

teraohm1,

I don't use this method but here's and article that talks about combining the two. http://www.4youradvantage.com/t&m.htm

Would it make sense to just figure out how many hours per day your average tech actually bills and adjust your price accordingly? Instead of adding minutes, add dollars per minute.
Pat

Adding additional $$ is sure the way to go.I agree.
The technician selling the job and doing the work usually gets his incentive by billable hours,so an increase in $$ but not in the minutes will not exactly benefit the tech nor increase any motivation to sell.

Pay the techs by percentage of dollars brought in, instead of by the hour and that will provide plenty of motivation to sell.

You just don't want to get into a situation where they are selling un-needed services to your clients just to make a few extra bucks.

There are "performance pay" programs out there that may help you set this type of system up.
Pat