Field service job costing: see every job's margin

Ask the owner of a maintenance or installation business which jobs make money and you will usually get an honest answer: "Most of them, I think." The invoices go out, the technicians are busy, the bank balance looks fine. But somewhere in the mix there are jobs that cost more than they earn, and they hide well.

They hide in the extra hour nobody recorded, the part taken from the van and never billed, the second visit to fix the first one, and the fixed price that was agreed before anyone saw the site. Job costing brings those costs into the light, one job at a time.

This guide explains what goes into a job's real cost, the habits that make the numbers trustworthy, and how to use the results.

What a job really costs

A job's margin is simple in principle: what you earn from the job minus what it cost you to do it. The trouble is that both sides have more lines than people expect.

On the revenue side:

• The agreed price. On a fixed-price job, the quote. On time and materials, the hours at your labour rate plus materials at their selling price.
• Approved changes. Extra work found on site that the customer agreed to pay for.
• Minus credit notes. Whatever you gave back after the invoice.

On the cost side:

• Labour. Every minute on the job, travel included if you count it, multiplied by what that person costs you per hour (pay plus the costs that come with it, not their billing rate).
• Materials. Parts and consumables at cost, whether they came from the warehouse or the van.
• Subcontractors and expenses. The crane hire, the specialist, the parking and the permit.
• Rework. The cost of going back to fix something, when the customer does not pay for the return visit.

Leave any one of these out and your margin looks better than it is. Rework is the one most often forgotten, because the return visit is usually recorded as a new job with no revenue, and the original job keeps a margin it never earned.

Five habits that make the numbers true

1. Record time where the work happens. Time typed in at the end of the week is a guess. A technician who taps "start travel", "arrived", "start work" and "finished" on their phone produces real minutes without filling in a timesheet.

2. Treat the van as a warehouse. If parts on the van are not tracked, every part used on site is either forgotten or entered from memory. A van with its own stock means a used part leaves the van once, at cost, when the job is approved.

3. Agree extras before doing them. Technicians find extra work on site all the time. Small extras within an agreed limit can go ahead; larger ones should wait for the office or the customer to approve them. Either way, they must be recorded on the job, or they vanish from the invoice.

4. Review before you invoice. A short office check on each finished job catches missing photos, unrecorded parts and extras waiting for a decision. It also stops an invoice going out for work the customer has not accepted.

5. Link rework to the original job. When a job redoes earlier work, mark it as rework of that job, with a reason such as workmanship, a faulty part or customer misuse. The cost then sits where it belongs, and the reasons tell you what to fix.

A worked example

Take a fixed-price air-conditioning service quoted at 1,200 in your currency. The technician spends three hours on site and one hour travelling; their cost to you is 60 an hour, so labour is 240. Parts from the van cost 310. A specialist cleaning product bought on the way adds 45. On paper, the margin is 1,200 − 240 − 310 − 45 = 605, about 50 %.

Two weeks later the unit leaks and the technician goes back for two hours, with a 90 part, not charged to the customer. That rework costs 210. The real margin of the original job is 395, about 33 %. Still a profitable job, but not the one you thought you had, and if the same model leaks on every second job, your price for it is wrong.

None of this needs a finance degree. It needs every cost recorded against the job, and a place where they add up by themselves.

What to do with the margins

Once each job has a reliable margin, the useful questions are about groups of jobs:

• By job type. Are installations more profitable than repairs? Is your annual maintenance contract priced to cover the visits it includes?
• By customer. Which customers generate the most rework or the most unpaid extras?
• By technician. Not to blame anyone, but to spot who needs training, who always runs over, and who is quietly your most efficient person.
• Worst first. Sort jobs by margin and read the bottom ten every month. The pattern is usually obvious once you look.

Then act on what you find: change the price of a job type, add a call-out fee, train a crew on a recurring fault, or stop accepting a kind of job you always lose money on.

Keep costs away from those who do not need them

Technicians need to see their jobs, the address, the checklist and the parts. Most do not need to see the price you charge or the margin you make, and showing them can create awkward conversations on site. Decide who may see prices, and who may see costs and margins, separately. A good rule: field staff see the work, managers see the money.

How to do it in Kluvan

Field jobs takes a job from the quote to the invoice and keeps the margin up to date on the way. Kluvan runs online with nothing to install: technicians use the job sheet in their phone's browser, and it keeps working when the signal drops.

• Set it up once. In Field work settings, set the extras approval limit, the labour rate, the call-out fee, job types, vans and hourly costs. See set up field work.
• Quote and dispatch. Create a work order with labour, parts and service lines and record the customer's approval, then assign it on the day or week dispatch board. Customers can also approve estimates in the Customer portal.
• Record on the phone. Technicians tap through travel, arrival, work and finish so time records itself, tick the checklist, take photos, record materials from their van and capture the customer's signature. See do a job on your phone.
• Extras and review. Extras above your limit wait for the office. Finished jobs land in a review queue, where the office approves extras and releases the job for billing. See review finished jobs.
• The margin card. Each job shows agreed revenue, approved changes, credit notes, labour (minutes × the person's cost per hour), materials at cost, subcontractors and expenses, and rework not charged to the customer, with the records behind each line. See read a job's margin.
• Job profitability. Compare margins by job, customer, technician, job type or project for a period, worst first, and export them to CSV. See see job profitability.

Parts leave the van or branch stock once, at cost, when the job is approved, using Warehouses. The approved job becomes a Books invoice in one step. Two rights decide who sees prices and who sees costs and margins, and the cost right can never be given to a field seat.

Field jobs is sold on its own and is part of the Service Business bundle and Kluvan One. Technicians use field seats, which cost less than full seats; see pricing.

If customer support often turns into site visits, see how tickets and portal requests feed field work in our post on a customer portal for invoices, quotes and payments. And if your technicians need safety certificates before they are sent out, read a training matrix that keeps certificates current.

Start with one job type this month. Record every cost on it, read the margins, and decide whether the price is right.