What is Flat Rate and Why Use it?

Flat rate is an exciting technique for service repair pricing that is quickly sweeping through the HVAC industry. It works by focusing on the individual repairs a technician performs and the average resources required to complete each repair. In other words, the number of hours an average technician needs to complete a job is recorded for each repair (called the labor factor), along with any parts or materials that are required for the repair.

To calculate the price for a repair, the labor factor for that repair is multiplied by the company’s base rate. The price of all parts and materials is then added. Since most companies charge a different base rate in different situations (such as for contract customers or overtime billing), most flat rate systems provide a means of calculating repair prices for multiple base rates. Every repair must be carefully planned out and documented in advance, and building an effective flat rate system from scratch is extremely difficult. Advantage Comfort Pricing is a comprehensive flat rate pricing system built by industry professionals that you can quickly and easily implement in your company.

Flat rate pricing solves many of the common problems associated with time and material billing, and provides several benefits of its own. With flat rate pricing, a technician can easily tell the customer exactly how much a repair will cost and how much time it should take to complete the repair. This eliminates the problem of customers calling in after they receive a bill and complaining that they were overcharged because the technician spent too much time on the repair. Not only that, but by comparing how many actual hours a technician spent at a job site with how many hours the flat rate repairs he performed were “worth,” a manager can easily track that technician’s performance. This makes it possible for managers to issue rewards to their top-performing technician. To learn more about the benefits of our Advantage Comfort Pricing flat rate system, click here.