Contractors, is that truck you drive and use for work paid for by the customer?
Going through the profit and loss of a contractor client recently we discovered that the contractor was not charging for the use of his truck for job related tasks.
He uses his truck to deliver tools, staging and equipment to the job. He uses it and to pick up materials and for small trash removal. He uses it to retrieve all the tools, staging and equipment from the job.
I asked him if he liked donating the cost of the truck to service his customer and he said
"no but I just never thought to put it into my estimate. I kinda figured that the truck is just the cost of doing business."
I replied exactly! It is the cost of doing business just like buying materials to build a project for a homeowner.
- The payment; the monthly payment times 12. If you own the truck outright figure the cost of leasing or paying for the same truck monthly. Even if you own your truck it will breakdown one day. It would be helpful to have enough in your account when you need it. Otherwise it will come out of your pocket.
- The insurance
- The yearly maintenance
- The gas
- Licensing and DOT fees
Simple $50.00 dollars a day example
If your yearly cost for your truck is around $12,000.00 you will need to portion $1,000.00 per month to your projects. If you figure you work 48 weeks of the year times 5 days you will be working 240 days. Using this example you would charge 50.00 a day to your project's direct cost. If you work less days you will need to figure more per day.
$12,000.00 divided by 240 days equals $50.00 per day. Do you think that is fair to charge your clients for the use of your vehicle for their project?
If you have more than one truck you should do the same for each. Don't forget trailers.
The above example spreads the cost out evenly throughout the year.
Add a line item to your estimate template
Make sure you add a line item in your estimate template so you do not forget to include it. Your template should trigger you to fill in the correct amount.
Remember this: "If you need to remember to remember something you will likely forget it."
Well thought out systems use templates and check lists to make sure things do not fall through the cracks.
Truck driver time is also a direct job cost
Another overlooked item is charging for the person driving the truck. If it is a an employee do you charge the time to the customer's job?
Contractor owner's driving time
If you are the owner using your truck to deliver something to the job do you charge for your driving time?
Ask yourself the question: am I using and driving the truck to facilitate a project for a consumer who hired me to build something for them? If the answer is yes you should be charging the cost of the truck and the person driving it to the job.
Apply Trucking and Truck Driving Time Before Markup, It Is a Direct Cost.
The cost of your truck and the driver is a direct cost and should be applied to to the direct costs portion (above the line) of the estimate.
You take the risk for the costs of your business. This is a legitimate and true direct cost to pass along to your customer.