How To Bill Clients For Material Plus?

415moto

How do you guys let the clients see material plus when you bill? Do you give them a copy of receipts? Or just make your own receipt with the cost/total?

Does anyone worry about clients/HO knowing the cost of materials and thus knowing cost of labor? I know we know our time is valuable, but clients dont always get that.

Input, opinions?

hatchet

With a T&M job - you don't need to show receipts until they request them. When I do T&M (not often mind you) I seperate each cost on the invoice for materials with a subtotal and time with a subtotal - then a seperate line item for the agree upon fee.. whether that's a percentage or a flat fee.
The worst thing about a T&M job is that you have to have open books.. but before signing contract your labor rates should be set, your markup amounts should be set, and your fee or markup percentage should be set. After that - just bill those amounts.

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Rich
WIT Construction Co.
Superior MT Contractor

415moto

thanks hatchet.

i didnt phrase my question right.
When we do jobs, or i do smaller jobs. Some material is included in the job, and the result is finished product, ie they pay for finished trim work, they get finished trim work.
Usually, when we bill clients for materials, for the most part we dont mark it up. They just pay materials, sometimes they meet us at the location to pay themselves for material.

But i noticed alot of guys here are saying they add 10-25% on top of material to the client. For example painters say they dont care what the client wants to use for paint, since the client pays for it.

How do others go about billing clients for materials then? Not T&M, but rather set labor, plus materials. Ie, a job is 10k to do, labor and stuff like nails and wood, etc is covered on our side...but the client is going to pay for the fancy millwork, granite,toilet, fixtures, etc. We'd be the ones picking it all up and working with the vendors and so on. What is other peoples protocol for billing that material?

realpurty2

We do those at a Cost Plus Bid or sometimes using Allowances built into the regular bid.

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RobertF

A lot of my "handyman" work is T&M. I tell the customer that I'll provide them with a list of what I'll need, if they want me to pick it up it's my hourly rate, port to port.

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-Robert F

hatchet

Just remember 415moto - whatever you charge for your markup and whether that's on the labor or as a set fee - you need to cover your overhead costs and make some profit with it. Take a look at www.markupandprofit.com and also the PILAO method for figuring markup. And make sure you're using a burdened labor rate to apply the markup to.

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Rich
WIT Construction Co.
Superior MT Contractor

Jason

Time and Materials is not the most effective way to run a business, but I use Time and Materials on handyman type projects. This is because handyman project run into a lot more issues (tear out, reinstall) and a lot of people who are hiring handymen want a lot of the little thing dones like door hinge repair, patching, etc. Of course we know what that intails. But, I noticed that people don't realize that sometimes repairing things costs just as much as getting something new.

Any project that is going to be over around $500 I bid. Day projects are time and material.

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