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    "Itemizing" an invoice- how detailed?

    On a typical service call job, or a small planned out job, that are agreed to be a T&M job with the HO or Business representative, how detailed do you typically get when making up your invoice?

    Do you just list, Time - $xxx(total cost), Mtl - $xxx(total cost), Total - $xxx(total bill)?
    Or, do you itemize how many hours it took (at what hourly rate), and what material was used (at what each item cost them), with a total?

    I'm trying to decide how to set up my method of invoicing.
    Another guy I work with typically doesn't get too itemized out with his invoice. He says it gives the customer grounds for arguing, or "dickering" with parts of the invoice.

    Thanks,

    #2
    Practically all our work is T&M. We show the detail because that is how we track inventory however we do not count every screw and scotchlok. QB can print the customers invoice in varying amount of detail. We just chose more.

    Some customers look over every detail and others only look for the total.

    One told me "Good work, but you charged to much for the terminal box." Why he picked that one item, I have no idea. There were more costly items on his bill and he wrote the check anyway.
    Tom
    TBLO

    Comment


      #3
      Originally posted by sw_ross View Post
      On a typical service call job, or a small planned out job, that are agreed to be a T&M job with the HO or Business representative, how detailed do you typically get when making up your invoice?

      Do you just list, Time - $xxx(total cost), Mtl - $xxx(total cost), Total - $xxx(total bill)?
      Or, do you itemize how many hours it took (at what hourly rate), and what material was used (at what each item cost them), with a total?

      I'm trying to decide how to set up my method of invoicing.
      Another guy I work with typically doesn't get too itemized out with his invoice. He says it gives the customer grounds for arguing, or "dickering" with parts of the invoice.

      Thanks,
      I agree with your friend. Materials can vary, inventory items I usually include every individual item, because if I don't it throws the inventory off, though I still need to adjust inventory periodically because it gets off anyway because of various reasons. Non inventory items or items that weren't entered at purchase as inventory you can lump together without effecting inventory tracking.

      Labor I stopped long ago itemizing number of hours and rate. You can send an invoice with 3 hours @ $100 = $300, you get some that complain about how high you are. If you instead just state "Labor - $300, for the same project - they aren't that likely to complain.

      I've seldom gotten much complaint on the price of an item sold, well at least most of your typical less then $25 items. You may still get a complaint about why is that AFCI breaker so high or something like that, but that isn't so much because of any markup as it is the item is kind of high to begin with.
      I live for today, I'm just a day behind.

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        #4
        95% of my work is T&M. Since it's T&M I believe I owe it to my client to show them what they are paying for. Therefore, I line item labor (hours x rate), travel (fixed fee), rentals (total cost per item, I don't show my markup), and materials (quantity x cost, cost is purchase price x markup, I don't show markup %). I show every material item separately except I have several miscellaneous line items for very cheap items that I lump together (nuts and bolts for example).

        When writing up an invoice or estimate from home, I have a computer application that makes this very easy and fast. I'm not so advanced in the field and hand write invoices for service calls using a printed price list (with pre-calculated markup) for materials. Since it's much more labor intensive to hand write the invoice and I only have so many lines on my invoice form without going to a continuation page, I tend to list the material in order from most expensive to least expensive. When I get to the last line, if there are only a few items left to list, I will lump them together as misc. materials (at the correct totalled price). (Note that I keep scratch notes of what was used on the job as I do it.) I have purchased a small computer and printer for the truck, just haven't implemented it yet.

        Based on what I hear on this forum, I think customers/clients in different parts of the country act differently. Or maybe it's just the clients I attract. Either way, I rarely get any pushback on my invoicing method. When I do, it's a reaction to the total price of the bill, which they thought would be less, not individual line items.

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          #5
          Originally posted by Coppersmith View Post
          Since it's T&M I believe I owe it to my client to show them what they are paying for. Therefore, I line item labor (hours x rate), travel (fixed fee), rentals (total cost per item, I don't show my markup), and materials (quantity x cost, cost is purchase price x markup, I don't show markup %). I show every material item separately except I have several miscellaneous line items for very cheap items that I lump together (nuts and bolts for example).
          I agree with this thinking. If it's T&M, I don't see how you can not itemize the billing.

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            #6
            I agree with the OP friend. I my self do not itemize the invoice unless I bring in additional contractor, equipment, additional warranty, building permits.....

            The electrical portion of the invoice is one price. Even on larger bid jobs I include everything above as a complete price, no break downs.

            The more chances you give the client to talk about the price more you will get questioned about it.

            If you have ten itemized lines on your invoice the client has ten chances to question the numbers. If you have only one total then that is only one question/objection that you have to answer to.
            Edward
            The only thing I know, is the progressive discovery of my ignorance

            Comment


              #7
              Originally posted by edward View Post
              I agree with the OP friend. I my self do not itemize the invoice unless I bring in additional contractor, equipment, additional warranty, building permits.....

              The electrical portion of the invoice is one price. Even on larger bid jobs I include everything above as a complete price, no break downs.

              The more chances you give the client to talk about the price more you will get questioned about it.

              If you have ten itemized lines on your invoice the client has ten chances to question the numbers. If you have only one total then that is only one question/objection that you have to answer to.
              So, if you hired a plumber to come in and do some work on T&M, and when finished you were handed a bill that said material $3,200, labor $6,236, you would be OK with that w/out seeing how much material and time you were paying for? I think not.

              Comment


                #8
                Originally posted by oldsparky52 View Post
                So, if you hired a plumber to come in and do some work on T&M, and when finished you were handed a bill that said material $3,200, labor $6,236, you would be OK with that w/out seeing how much material and time you were paying for? I think not.
                Well if all they did was fix a leaking faucet for a grand total of $9436, I might question things, if they installed a complete septic system, I might not be asking many questions, in fact that may be somewhat of a bargain.
                I live for today, I'm just a day behind.

                Comment


                  #9
                  Originally posted by oldsparky52 View Post
                  So, if you hired a plumber to come in and do some work on T&M, and when finished you were handed a bill that said material $3,200, labor $6,236, you would be OK with that w/out seeing how much material and time you were paying for? I think not.
                  If it took them 10 minutes or even an hour then I would question it. If it that much amount then I would get 2nd opinion. But the customer generally looks at the bottom dollar.

                  I don't understand why "US" the service providers are giving the customer the option to ask for T&M. Don't give them the option.

                  I personally don't care if the labor is $XX or the material is $XX. I look at the final dollar amount and I think majority of the people are that way.

                  Almost every other business does not do T&M. McDonalds, restaurants, dentist, doctor, (most) auto mechanic, the permit counter, grocery store, landscaper, hair stylist.... list goes on. And I dare to ask them for T&M, they will kick me out. "Excuse me can you give a break down on that cheese burger?"

                  Why do we as electricians do T&M. I simply do not understand. I know, I know that is what the customer wants. Train the customer that your business does not run on T&M.

                  Customers ask me why I charge per task, because you know what the total is. Weather it takes me 10 minutes or 6 days. And almost 100% of the time they agree.

                  Obviously if I charge $7000 for 2 hour worth of work then I will get investigated unless it was an expensive repair or I was the better salesman.
                  Edward
                  The only thing I know, is the progressive discovery of my ignorance

                  Comment


                    #10
                    Originally posted by edward View Post
                    If it took them 10 minutes or even an hour then I would question it. If it that much amount then I would get 2nd opinion. But the customer generally looks at the bottom dollar.

                    I don't understand why "US" the service providers are giving the customer the option to ask for T&M. Don't give them the option.

                    I personally don't care if the labor is $XX or the material is $XX. I look at the final dollar amount and I think majority of the people are that way.

                    Almost every other business does not do T&M. McDonalds, restaurants, dentist, doctor, (most) auto mechanic, the permit counter, grocery store, landscaper, hair stylist.... list goes on. And I dare to ask them for T&M, they will kick me out. "Excuse me can you give a break down on that cheese burger?"

                    Why do we as electricians do T&M. I simply do not understand. I know, I know that is what the customer wants. Train the customer that your business does not run on T&M.

                    Customers ask me why I charge per task, because you know what the total is. Weather it takes me 10 minutes or 6 days. And almost 100% of the time they agree.

                    Obviously if I charge $7000 for 2 hour worth of work then I will get investigated unless it was an expensive repair or I was the better salesman.
                    I wouldn't say electricians are the only ones that do time and material, it actually is somewhat common for service businesses. Some tasks maybe are "standard" tasks and there is set fees for those tasks, but when something doesn't work and a serviceman is called to fix it, he at least needs to do some investigating before he will even know what is needed to fix it. You may find out what is wrong in less then 10 minutes and even have some common components on hand and have it fixed already before there was even time to figure an estimate in some cases, others it may take a couple hours to find out what is wrong, maybe a couple more hours to find where you can find the necessary replacement components as well as figure out what they may cost.
                    I live for today, I'm just a day behind.

                    Comment


                      #11
                      Originally posted by edward View Post
                      ....

                      Almost every other business does not do T&M. McDonalds, restaurants,.....
                      This is our primary customer..... we build them, remodel them, and do a lot of service work for them in our region.

                      We flat-rate everything on service, and I think it's one of the reasons they stick with us, along with knowing their stores inside and out.

                      As for itemizing, you could do it similar to how I itemize using flat-rate by writing a brief description of the work but instead of a flat price, just split it into material & labor for each line item. Idk maybe write "material for adding receptacle = $xx.xx - labor = $xxx.xx" and so forth for each item. I'd keep it as simple as possible.





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                      Comment


                        #12
                        Originally posted by edward View Post
                        I don't understand why "US" the service providers are giving the customer the option to ask for T&M. Don't give them the option.
                        I find it very odd that you said customers are asking for T&M. They aren't. The vast majority of customers would rather have a fixed price. I want to do jobs T&M because it's better for me. I don't have to estimate (guess) how long something will take. I don't have to curse my luck when I find something hidden that adds hours to the job. I get paid for every hour I work and every part I use.

                        Sure, I don't have an opportunity to hit the jackpot by getting a job done in half the time, but I'm not trying to screw anybody. I don't have HO's saying "that only took an hour, how come you're charging me $500?" All my business is by referral from happy clients because I treated them fairly.

                        Comment


                          #13
                          Line Items

                          I generally am obligated to itemize my invoices (Commercial) per the project contract agreement. I do this via a schedule of values broken down to general activities such as Mobilization, Rough-in, Devices, Lighting and Close out. Some project require more of a breakdown such as Rough-in conduit and rough-in conductors.
                          Itemizing T&M Invoices for inventory purposes has always proved time consuming and is only accurate for a few months, then you must audit your inventory and make adjustments on your software. It's sure nice to have inventory tracked, however it sure does take time. You'll have to go through it yourself and make your own opinions.

                          Good Luck

                          Comment


                            #14
                            Originally posted by Coppersmith View Post
                            I find it very odd that you said customers are asking for T&M. They aren't. The vast majority of customers would rather have a fixed price. I want to do jobs T&M because it's better for me. I don't have to estimate (guess) how long something will take. I don't have to curse my luck when I find something hidden that adds hours to the job. I get paid for every hour I work and every part I use.

                            Sure, I don't have an opportunity to hit the jackpot by getting a job done in half the time, but I'm not trying to screw anybody. I don't have HO's saying "that only took an hour, how come you're charging me $500?" All my business is by referral from happy clients because I treated them fairly.
                            I'm not trying to convert anyone to a different system here, but I will tell you that in flat-rate, the customer needs to see more value in hiring you than just getting the job done. I can get as detailed as you like in that, but this is the short answer.

                            I've never once had anyone say to me that they felt overcharged based on how quickly I completed a job using flat-rate pricing.

                            I'm sure our goals are the same; build great relationships and be profitable. I do believe flat-rate is a more fair option though. I'd be willing to answer any questions you have on that if any.


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                              #15
                              Originally posted by brantmacga View Post
                              I'm not trying to convert anyone to a different system here, but I will tell you that in flat-rate, the customer needs to see more value in hiring you than just getting the job done. I can get as detailed as you like in that, but this is the short answer.

                              I've never once had anyone say to me that they felt overcharged based on how quickly I completed a job using flat-rate pricing.

                              I'm sure our goals are the same; build great relationships and be profitable. I do believe flat-rate is a more fair option though. I'd be willing to answer any questions you have on that if any.


                              Sent from my iPhone using Tapatalk
                              I am with you I am not trying to convert anyone over but I do agree with you.

                              Further more, If I get called to change a bad switch and after basic troubleshooting it comes out to be the switch and when the customer decides to change other four switches. I plug into my flat rate program and I present to the client 4 switches at $67.47 per switch total $269.88.

                              It takes me less than 1 hour to do the work. If I were to charge by the hour it would be $75 plus material total about $100. I just left $169 on the table.

                              If any one is interested PM me I can introduce you to a flat rate program and a sale class.
                              Edward
                              The only thing I know, is the progressive discovery of my ignorance

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