T&M Question......Ethics....

[JacksonburgFarmer]

First off, I know some of you dont like T&M, for several reasons......FWIW, I am starting to SOMEWHAT agree with you.....that is another topic.....

Case in point, I have some T&M going now, for a very good contractor (tele/data). We have our contract and agreement, no problem there at all.....

I have noticed that between my supply houses that there is a QUITE NOTICABLE difference on some items.....

Say I order x amount of conduit at supplier a, and they only have half of the amount I need, and I get the rest from supplier b. Supplier B price is 35% less than supplier a. How would you bill this???? List sepreate, or use supplier a price for both, and make a little extra????
I guess it is more of a ethics question....surely someone has been through this before....????

 

[Rewire]

When I invoice it has my markup so I sell a stick of conduit for $5.00 it does not matter if I bought it at $3.00 or $2.50 I still sell it at the set price

 

[jrannis]

You will find that you will have to average your pricing. It will all work out.
Some people track the last highest price paid and use that price. Some will only purchase at a targeted price (better have some volume to negotiate that move)

 

[Mule]

I have two methods of invoicing....If its a quoted job, they just pay the end price, I dont provide a breakdown at all.......If its T&M I give vendor invoice numbers and show cost and markup
heres an example
(CED#777458 $500.00x 1.25=$625.00)

I dont show individual unit prices, only ticket totals, but my customers have the right to view the vendor invoice upon request on T/M, but (knock knock) Ive not had one soul question my unit prices.....which I find amazing....

I do re-stock alot of un-used materials on the van, instead of returning them, unless of course its an expensive item, or something I just dont want on the van. My theory here is if Im working T/M and they pay me the labor for two men to return the parts, if my material drag was close to start with, they are going to loose money. So, honest? ....maybe, maybe not...I could leave the un-used materials with the customer but I dont. In return, customers benifiet from me having a stocked van and we have minumal return trips to the supply house.

 

[RJohnsonMasterElectrician]

they don't need to know what you paid for it. Don't forget you had to travel to two places to get all your parts, who or which mark up is going to pay for your gas and time. Where I was working I was able to charge 50 to 60 an hr and mark up of 1.88. I was told I was even low at those numbers. And then if the people were from Jersey, Mass, Conn, or NY city my mark up and hourly went higher for PIA charge.

 

[kbsparky]

If your agreement calls for a specific mark-up on materials, then you need to average your costs before applying your mark-up fairly.

OTOH, if you are merely itemizing your materials on your invoices, then base your price on the highest costs from your supplier invoices. Then, consider the extra amount earned as money in your pocket for having to go to the extra trouble of buying from more than one source.

 

[quogueelectric]

Go with the higher number and dont lose a minutes sleep over the few bucks you stand to make. Who helps you out when you run into an unforseen difficulty in a wall or slab. You seem honest enough they are lucky to have you.

 

[LarryFine]

Agreed. You should be the one to reap the rewards of your extra shopping efforts.

I rarely buy at the prices I use to quote, unless there's no shopping time available.

 

[iwire]

but my customers have the right to view the vendor invoice upon request on T/M,

They have no right to see anything, you can certainly choose to let them see it.

 

[don_resqcapt19]

They have no right to see anything, you can certainly choose to let them see it.

That would depend on your contract with the customer. We have contracts that require we submit signed time sheets and vendor invoices with the t&m invoice. This should not be an issue for an honest contractor. If I was the customer and I asked for this type of documentation and there was even the least bit of hesitation on the part of the contractor I would not use that contractor.

 

[Dnkldorf]

That would depend on your contract with the customer. We have contracts that require we submit signed time sheets and vendor invoices with the t&m invoice. This should not be an issue for an honest contractor. If I was the customer and I asked for this type of documentation and there was even the least bit of hesitation on the part of the contractor I would not use that contractor.

+1


same here

 

[Mule]

They have no right to see anything, you can certainly choose to let them see it.

They have the right, because that's the understanding with my T/M agreement. Or, as you state it, Yes I choose to do it that way.

 

[charlietuna]

There is nothing wrong with T&M billing especially if the work your doing has a lot of unknowns! We were never questioned by our customers and built a solid trust in our relationship! If there was something they wanted a contract price on, we gave it to them, but there wasn't many of them. My material markup was high due to the nature of supplying the materials to floors of a high rise office building. This required elevator schedualling with the building management company and supply house co-ordination.

 

[iwire]

They have the right, because that's the understanding with my T/M agreement. Or, as you state it, Yes I choose to do it that way.

As I said, it's not a 'right' it is a decision you have made.


Nothing personal but I can see no reason whatsoever to show them your prices. None, never, ever, not their darn business.

Does the grocery store you shop at show you the price they paid? Does the supply house show you what they paid? Does anyone you do business with show you what they paid for what they are selling you?

Why would you want to show them your costs? :-?

 

[NolaTigaBait]

As I said, it's not a 'right' it is a decision you have made.


Nothing personal but I can see no reason whatsoever to show them your prices. None, never, ever, not their darn business.

Does the grocery store you shop at show you the price they paid? Does the supply house show you what they paid? Does anyone you do business with show you what they paid for what they are selling you?

Why would you want to show them your costs? :-?

yeah, but for some reason people expect you to show them your materials breakdown....i agree , iwire, you don't ask for a breakdown of your subway sandwich!...so, why should we breakdown our materials?

 

[iwire]

yeah, but for some reason people expect you to show them your materials breakdown....i agree , iwire, you don't ask for a breakdown of your subway sandwich!...so, why should we breakdown our materials?

Even when the office does itemize each piece of stock they do not tell the customer our cost of each piece. :smile:

 

[Rewire]

Even when the office does itemize each piece of stock they do not tell the customer our cost of each piece. :smile:

Bob is right when I do T&M they are buying the time from me as well as the materials from me why would I give them my cost? If they want a material breakdown then they get it but it reflcts my selling price not my purchase price. We keep alot of material in inventory because we buy in quantity for a better price so on T&M jobs we are pulling from our stock not making daily trips to the supply house.

 

[LarryFine]

Bob is right when I do T&M they are buying the time from me as well as the materials from me why would I give them my cost? If they want a material breakdown then they get it but it reflcts my selling price not my purchase price.

Absolutely! People seem more concerned with how much our work costs us than how much it costs them.

"Hello, I'm price shopping for some electrical work, and I want to hire whoever will make the least profit."

 

[NolaTigaBait]

Absolutely! People seem more concerned with how much our work costs us than how much it costs them.

"Hello, I'm price shopping for some electrical work, and I want to hire whoever will make the least profit."

thats human nature...most people resent me for making a profit off of THEM...if they only knew what it takes to run a successful ONE man shop......i agree 100% with Larry's assessment!

 

[NolaTigaBait]

I want to hire whoever will make the least profit."

quote of the day!....i get this alot