Getting paid by billable hours

[ARPA]

Originally posted by alpha480v
It looks like to me that some posters on this thread are misunderstanding the difference between Flat Rate and Billable hours.

Billable hours to me is portal to portal, meaning you are paid from the time you get dispatched until the time you get home. This means gassing up the vehicle, picking up the parts, Driving to the call, diagnosing the call, making the repair, writing up the service invoice, and finally the drive home. Many commercial contractors operate this way. How do you as a tech lose out on hours this way? You are paid for everything that has to do with that particular call. How does the owner lose out on this? He charges the customer for every minute that is on the techs service invoice. This is win-win to me.

This is how I understand billable hours are done, It is how I do commercial work.

The only way that I can be convinced that a flat rate system would work would be is if 1)the contractors coverage area is small, maybe 1/2 hour or less, and 2)he is residential.
And finally, Nobody has yet explained who stocks the trucks and gases them up under a flat rate system if your not paying the techs to do it? Or is this covered in the magic flat rate book?

Hmm,
I am pretty sure in my post I did mention how flat rate works for my residentail....

[dhvac]

arpa
do you have any more info you could send me on how this works this looks like the perfect setup

i like that it pays you for what you do not how long it takes you to do it

i also like the fact that good techs would make money and the bad ones will leave due to going broke

any help at all would be greatly appriciated
thanks
dave


ps my email adds is in my profile if you could send anything

[oil lp man]

That billing the customers for miscellaneous stocking the van and other stuff I mentioned won't fly with "residential" customers.

[ARPA]

Dave:
sent.

[cg2]

[i]

Back then, 20 years ago, his flat rate was 120.00 an hour...


[/B]

There's what made it work, charging enough to pay the tech well and still make a profit. Too many people in this biz cant do enough math to figure what they need to charge to make a profit. 2 times hourly wage? 3 times? more?

[nesc522]

Originally posted by alpha480v

Billable hours to me is portal to portal, meaning you are paid from the time you get dispatched until the time you get home. This means gassing up the vehicle, picking up the parts, Driving to the call, diagnosing the call, making the repair, writing up the service invoice, and finally the drive home. Many commercial contractors operate this way. How do you as a tech lose out on hours this way? You are paid for everything that has to do with that particular call. How does the owner lose out on this? He charges the customer for every minute that is on the techs service invoice. This is win-win to me.

This is exactly how the shop I work is, and it works well for us. I would be worried about working for a company that didn't have enough work and being paid on billable hours, but we do market work and there is all the hours you want. I average 60 to 65 hrs a week, get paid when I leave my house and until I return home. I don't know about the other guys, but I make sure all my time is billable( gassing van, parts and etc). If it is a van maint issue, or some company thing that is not for a customer, then the company has to send us a non-productive work order and my time goes on that. Consitently getting 20-25 hrs or more of overtime is the reason I came back to this company.

[alpha480v]

Originally posted by oil lp man
Alpha,
How can you call picking up parts, cleaning out the van, stocking the van , turning in invoices, washing the van, picking up special tools to do a job, meetings, training, etc. billable to the customer? They only want to pay for the time you are there and maybe 1/2 hour travel at most.

1).Picking up parts on the way to the job is part of the job. Why shouldn't that customer be charged the time to pick up the parts for their job?

2).No need to clean out the van if everything is put back in it's place. It is difficult To keep a van clean I know, but I worked refrigeration service, and ran myself ragged, but my van was clean, and stocked.

3).Washing the van? What's that? Never did it.. Bosses would not pay me for it, so it didn't get clean. Not my vehicle MR.boss-man!

4). Training, shop meetings are shop time, billable as such on the time card. Again, If not going to be paid for it, I don't do it, period.

You can't totaly eliminate shop time in a commercial shop. Some things the techs do just can't be billed to a customer. But it's not a free lunch either. If you want your techs to go to training, service meetings, ect., they have to be paid.

[alpha480v]

Originally posted by nesc522

Originally posted by alpha480v

Billable hours to me is portal to portal, meaning you are paid from the time you get dispatched until the time you get home. This means gassing up the vehicle, picking up the parts, Driving to the call, diagnosing the call, making the repair, writing up the service invoice, and finally the drive home. Many commercial contractors operate this way. How do you as a tech lose out on hours this way? You are paid for everything that has to do with that particular call. How does the owner lose out on this? He charges the customer for every minute that is on the techs service invoice. This is win-win to me.

This is exactly how the shop I work is, and it works well for us. I would be worried about working for a company that didn't have enough work and being paid on billable hours, but we do market work and there is all the hours you want. I average 60 to 65 hrs a week, get paid when I leave my house and until I return home. I don't know about the other guys, but I make sure all my time is billable( gassing van, parts and etc). If it is a van maint issue, or some company thing that is not for a customer, then the company has to send us a non-productive work order and my time goes on that. Consitently getting 20-25 hrs or more of overtime is the reason I came back to this company.

That's how the last 2 companies that I worked for did it. Some things just can't be billed to the customer, like a truck breakdown or oil change. But we as techs can't be expected to do extra stuff off the clock either, without being paid for it! That's what the shop time is for.

[isitfixedyet]

they just dont want to charge the customer more, when its easier to charge the tech! or employee!
truth be known , for lack of better terms!

[oil lp man]

Originally posted by alpha480v

Originally posted by oil lp man
Alpha,
How can you call picking up parts, cleaning out the van, stocking the van , turning in invoices, washing the van, picking up special tools to do a job, meetings, training, etc. billable to the customer? They only want to pay for the time you are there and maybe 1/2 hour travel at most.

1).Picking up parts on the way to the job is part of the job. Why shouldn't that customer be charged the time to pick up the parts for their job?

2).No need to clean out the van if everything is put back in it's place. It is difficult To keep a van clean I know, but I worked refrigeration service, and ran myself ragged, but my van was clean, and stocked.

3).Washing the van? What's that? Never did it.. Bosses would not pay me for it, so it didn't get clean. Not my vehicle MR.boss-man!

4). Training, shop meetings are shop time, billable as such on the time card. Again, If not going to be paid for it, I don't do it, period.

You can't totaly eliminate shop time in a commercial shop. Some things the techs do just can't be billed to a customer. But it's not a free lunch either. If you want your techs to go to training, service meetings, ect., they have to be paid.

Commercial and residential are totally different. Apples and oranges. 90% of what we do is residential. And no we don't charge to pick up parts that are not on the van, even if its an OEM part.
I do oil service and propane service where most only do one or the other. So yes my van requires more attention.
Half the time I have to spend 10 minutes to get at a part that is buried. And it is a chore to find room for the stock I need to replace after everything has settled in its place.
But if I have to spend more time cleaning my van because of this on my time, I will gladly remove half my van stock and dump it in the garage.
And no I don't make a big difference in pay for being licensed to work on oil and propane units. But the more we are pressured to do things on own time the more money that is required.
Washing the van. LOL. you got me on that one. I will wash it once a week on my time or until the road salt eats all the paint off whichever comes first. I guess maybe I'll do that on my lunch break. Oh yeah, no time for lunch.
As far as mandatory meetings go the law says you have to pay. So theres no way around that.

[neophytes serendipity]

Originally posted by isitfixedyet
they just dont want to charge the customer more, when its easier to charge the tech! or employee!
truth be known , for lack of better terms!

Plenty of that around here- even within union ranks.

Don't provide a truck for the boss to use to get his materials to the site? Layoff

Don't provide hand and power tools above and beyond those listed in the contract tool list (that the employers sign)? Layoff

Don't provide a phone so the boss can call you on it and ask why aren't you done yet? Layoff

Nothing like subsidizing the business and buying your job so the boss can buy that new Harley, Lexus, second vacation home...

Plenty of people here say unions are crooked... Unions got plenty of competition from crooked employers.

[timmay]

my my my
i was looking for this thread.
I've always worked for a company that pays hourly.
Get paid from the minute we get to the shop to the end of our last call.
I always thought this was the way to go.
we've had a slow year, at least it seems that way to me.
I can't get an 8 hour day to save my life.

now some friends in the business say that it's my fault. I should slow down. but I'm of the mind set that if i do fast, clean work and get the job done correctly i should be compensated for that. and i have. For only a 3rd year tech i can't quit cause I'm paid so far out of scale i would take a pay cut at any job i go to. i even went on an interview and the guy said everyone working for him would be pissed if he even matched my salary.

Hell, I'm not even a ninja tech. In my opinion i have TONS to learn still. But i make customers feel good about repairs, i explain everything, make sure they know exactly what they are in for before i make a repair. i have more call back requests (not call backs) than anyone at the shop. You'd be surprised what a smile and a good attitude get you.

enough self praising

I've always thought being paid by billable hours was a rip off to the tech. i can see now that it does have positive and negative sides. If you're a fast tech = good. If you're slow = bad. The thing i've always thought was that it encouraged unneeded repairs to pad the bill and time.

customer is low on 22. They want a gas and go. not sure what others are charging per pound. lets say they need 2lbs. for us that would be roughly 50 plus trip. Lets say thats every call i get for that day 6-8 calls. Thats not alot of money. So then i start looking for anthing to get an extra buck or two. i don't work well doing that.

ok. not sure if i presented that well but you get the idea. This thread has been very enlightening.

[timmay]

Originally posted by oil lp man
I guess billable would be ok if I was taking half. And half of the markup on parts.
Or maybe we could do a straight subcontract and you could forget about benefits and I will supply my own van and parts and I will give you 10% of billable time only. But if I'm busy with my own customers I will give your customers(soon to be my customers) a window when I will be there.

Let me discuss it with my calculator, I will get back to you.

i know a company like that.

offered me a job and after all is said and done you don't make much more than anyone else.

his deal.

you stock the truck w/ your own $$
he has an ENORMOUS ad campaign, every single phone book in the area, whole page ads.
you do a call,
no trip charge if a repair is made
After you bill them. You get the money back to replace the part and the rest is split 50/50
thats it.
your truck
your gas
your parts
your repairs
your insurance
his advertising

i had to pass.
I will admit a friend went to work for him and he is making $$. but he's also pulling 12 hour days 6 days a week (appliance repair is a BIG chunk of thier business). He told me what one of his weekly checks were. $700 of which was parts replacment $$. If i put in the hours he worked, then subtrack all the stuff he has to pay for, van, gas, health insuance.... he makes 2 dollars an hour more than me. No going higher cause he's already at a 50/50 split.

[oil lp man]

Originally posted by timmay

Originally posted by oil lp man
I guess billable would be ok if I was taking half. And half of the markup on parts.
Or maybe we could do a straight subcontract and you could forget about benefits and I will supply my own van and parts and I will give you 10% of billable time only. But if I'm busy with my own customers I will give your customers(soon to be my customers) a window when I will be there.

Let me discuss it with my calculator, I will get back to you.

i know a company like that.

offered me a job and after all is said and done you don't make much more than anyone else.

his deal.

you stock the truck w/ your own $$
he has an ENORMOUS ad campaign, every single phone book in the area, whole page ads.
you do a call,
no trip charge if a repair is made
After you bill them. You get the money back to replace the part and the rest is split 50/50
thats it.
your truck
your gas
your parts
your repairs
your insurance
his advertising

i had to pass.
I will admit a friend went to work for him and he is making $$. but he's also pulling 12 hour days 6 days a week (appliance repair is a BIG chunk of thier business). He told me what one of his weekly checks were. $700 of which was parts replacment $$. If i put in the hours he worked, then subtrack all the stuff he has to pay for, van, gas, health insuance.... he makes 2 dollars an hour more than me. No going higher cause he's already at a 50/50 split.

But when I mentioned 50% of profit on his parts that included 50% on labor and I still get bennies and use his van and gas.
Otherwise they can screw.
But if you're only a journeyman then you are at the mercy of whoever you are working for or go find another job.
But if its your license that he is using to work you with then you leave and he will have to find someone to replace that license with.

[Edited by oil lp man on 12-10-2006 at 01:37 PM]

[Milk man]

Originally posted by dhvac
so you would rather work more hours for the same money ?

Sorry it took so long to get back.

I don't mind working 40 hours a week for less money when I know week after week I'll be working. I like the security. I expect the owners to manage the workload so there will be work for everyone in February. I expect the owners to manage the company funds so there will be money to pay employees during the slow times. In return I will be there when I'm needed. Day or night. July or February.

To me it's all about what goes on the 1040 at the end of the year. Taking into consideration that I'm not spending 80 hours a week at work in July and zero hours for the month of February.

[Milk man]

My shop time is pretty productive. I can look around and see things that need to be taken care of. Hardly any of it is BSing with other techs. And when we do talk it has mostly to do with past jobs. Sometimes we just talk though. I'm closer to these people at my job than any other shop. It's a friendly place and we are will to help one and another. I think if we where ran out of the shop everytime, it would not be as friendly and we would not help eachother as much.

[Milk man]

Every day. I know how and I do. It's certianly not about money management.

[dhvac]

milk man
i was not even trying to suggest that you shouldnt get a "regular paycheck" in the reguards to every week what i am saying is that there has to be a way to pay you well enough in the time that you do, you own job (not sweeping the floor or changing oil) that you shouldnt have to put up with the work that i hated so much when i worked for someone else

if you can get paid on productivity then you should make more money in less time there for when it is slow you should still have enough to live without having to do tasks that are better suited for a janitor

also if you do more work and make more for the company then why should the guys slacking off make the same paycheck?

[secorp]

The only time I ever worked Piece meal was with installation.
This thread has now taught me the difference between Billable and Flat Rate.
Sounds like it works better in Resi. than comm.


I am commercial hourly now and never been happier!
I will stay Hourly!

[Milk man]

milk man
i was not even trying to suggest that you shouldnt get a "regular paycheck" in the reguards to every week what i am saying is that there has to be a way to pay you well enough in the time that you do, you own job (not sweeping the floor or changing oil) that you shouldnt have to put up with the work that i hated so much when i worked for someone else

if you can get paid on productivity then you should make more money in less time there for when it is slow you should still have enough to live without having to do tasks that are better suited for a janitor

also if you do more work and make more for the company then why should the guys slacking off make the same paycheck?

It must just be the way I'm wired.

I don't think I've been in a well enough orginized shop that could support performanced base pay. I do a lot of clean up. Hard to bill someone that has spent $500 and their furnace still isn't running.