RITE-FORMS SYSTEMS
Among The Best Things To Happen To The Building Trades.
Time and Materials (T&M)
Every Building Tradesman has heard of Time & Materials, or T&M. There are many costs that do not define as time (physical labor) and materials (construction materials and replacement parts). Because of this, lots of job costs slip through the cracks. This leads to inaccurate estimates and poor job costing. Ultimately, a Job Estimate is just that, an estimate, or approximation of the costs it will take to do any size Building Trades jobs.
Since T&M has been around for a long time, which is why most business forms have been modelled around T&M, especially, invoices. Personally, when someone who I hired hands me an invoice that relies on T&M, I’m very skeptical. Not because I think the person is being dishonest, but because I know that T&M are a rough estimate of what things really cost.
Here are some things in the HVAC trade that do not qualify as T&M:
- Shipping, postage, etc.
- Tools – both hand tools and powered tools
- Transfer station fees
- Hazardous materials disposal
- Permits & Inspections
- Vehicle costs
- Subcontractors
- Supplies
- Administrative Costs
- Fill in the blank… there’s more! A lot more.
Whether its freight for shipped equipment, or an electrical sub who will run the power wiring to that equipment, neither are time or materials.
That’s why I created a 4-cost category system: Time; Materials; Vehicle and Other. Inside the Other category are four more subcategories. These systems involve Job Estimating; Job Costing and Job Billing.
Flat Rate (FR)
Flat Rate (FR) systems historically have their roots in the automobile repair trade. Then, Flat Rate for the Plumbing and HVAC trades was created in the 1980s, as a more-profitable-than-T&M means for billing for repairs and maintenance work. The originators of FR systems for the mechanical trades were correct in their understanding that tradesmen were seriously short-changing themselves using T&M billing.
FR users often take advantage of the fact that their prices are not based on T&M, they are based on a set price for replacing a part or making a routine repair. The building owner typically has no idea what parts (they’ve never heard of) cost, so have no basis for which to object to seemingly unreasonable charges. This can lead to mistrust or distrust between the parties. Then, there are those who make up stories about work that was done, or needed to be done, when this is often not the case, and why FR thieves often cross the boundary into the domain of consumer fraud. To say that FR is a win-win outcome for building owners, is not true. Just look online at your state’s Department of Justice website. You just may find filed complaints against FR plumbing & heating companies. FR is by far, the worst outcome for building owners, whereas, it is often a boon for the FR companies who use or misuse them.
Quote-Rite (QR) & Bill-Rite (BR)
Each cost category in Quote-Rite Job Estimating, Job Costing and Bill-Rite Invoice combine to include virtually all costs to do any building trades small job or large project.
Quote-Rite Job Costing single-part forms keep track of all costs as a job progresses. When the job has been completed, the relevant data on each paper worksheet is transcribed in the Quote-Rite Job Costing Excel Workbook. All categories of costs are then calculated and subtracted from the Estimate sell price. Whether gross profit is negative or positive, will be revealed. Good estimators can become even better by being informed with every job’s profit outcome, especially since many are paid commission on sales or net profit.
Quote-Rite and Bill-Rite include (1) Time, (2) Materials, (3) Vehicle, and (4) Other. Additional pads of forms including, Materials Transfer (from one job to another), Job Information (sketches, model and serial numbers, for example) and Purchase Order. Bill-Rite includes Invoice – paper and digital. All pads are neatly kept inside a corrugated plastic carrying case, designed to take a construction site beating.
Keeping all requisite numbers organized and precise is just good business practice that respects the customer’s position – to get reasonable value from the transaction and repair, and not feel the need to question every invoice total.
Nobody loses with Rite-Forms. The building owner/customer is confident with the details in the Job Estimate, and Proposal, and satisfied with the price on the Invoice for the completed work, because the numbers are all proven and justifiable.
Still not convinced?
Quote-Rite and Bill-Rite are the easiest, most profitable, most accurate, most precise and honest Job Estimating, Job Costing and Job Billing Systems available to the Building Trades, and they are Easy-To-Use! Digital and Paper forms collect all the numbers one needs to professionally bill for Building Trades services.
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The bottom line is, if you can’t seem to make an honest living, you need the best solution left: Rite-Forms.