GETTING EQUIPMENT COST ONTO THE JOB.
Allocation is a separate problem from rate building, and it fails more often. You have three bases to pick from: hours operated, days on site, or a percentage of the labor cost on that job. Each one needs a field document behind it. Without one, the allocation is a monthly plug somebody enters from memory. The charge posts to the job and credits an equipment account. The actual ownership and operating costs post to that same account. The balance left over is your over or under recovery. Nobody looks at that balance, and it's the number that tells you whether the rate is right. Whatever you don't recover stays in overhead, so every job on the report reads better than the work really did.
You can build a defensible charge rate and still get nothing out of it. A rate that never reaches a job is only a spreadsheet. The cause is almost always in the field, where nobody was asked to record which machine was on which job for how long. So the office allocates by memory at month end, and the numbers move around between jobs. The first time anybody notices is when two similar jobs report margins twelve points apart and nobody can explain why.
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WHAT IT MEANS.
Equipment cost allocation moves the cost of owning and operating a machine out of a company-wide pool and onto the jobs that used it. It does that with a charge rate applied to a measured quantity of machine time.
The three bases do different jobs, so pick one for each class of equipment. Hours operated suits a machine whose cost is mostly consumption and wear, like a pump or a compressor that either operates or doesn't. Days on site suits owned iron whose cost accrues whether it moves or not, and that's most of a dirt fleet. A percentage of labor cost suits small tools and consumables. Nobody is going to track those one by one, and they scale with crew size anyway.
Whichever basis you choose, the rate has to be built before it can be allocated. The rate build is a separate exercise with its own page. This page assumes you already have a defensible daily or hourly cost for each machine. What's left is getting it onto jobs and proving it posted correctly.
WHY THE COST NEVER REACHES THE JOB.
The field doesn't record machine time, so allocation is a plug
Crews report labor hours because payroll depends on it. Nobody asks them for machine hours, because nothing visible goes wrong when they're missing. So at month end somebody in the office assigns equipment cost across jobs from memory and from where the machines probably were. That number is wrong job by job, in both directions. That's worse than leaving the cost in overhead, where at least it's honestly unallocated.
Nothing reconciles what was charged against what it cost
Charges go out to jobs. Real costs come in as payments, fuel invoices, and repair bills. In most books those two never go through the same account. Without that comparison you can't know whether the rate is high, low, or right, so the rate stays at whatever somebody set years ago. The reconciliation is one account balance read once a month, and it's the only feedback the rate ever gets.
Whatever isn't recovered stays in overhead, flattering every job
Unallocated equipment cost stays in the overhead pool. That makes the overhead rate higher than it should be and every job's direct cost lower than it really was. So bids get priced with too much overhead and jobs get reviewed with too little cost. Both numbers are wrong in the direction that feels good, and that's why this problem lasts for years.
WHAT IT LOOKS LIKE IN DOLLARS.
Take one excavator with a charge rate of $650 per day on site. In a month it gets charged to jobs for 42 machine days, so $27,300 goes onto jobs. The actual ownership and operating cost for that machine in the same month, meaning the payment, insurance, the replacement reserve, fuel, and one repair, totals $34,000. The account is under recovered by $6,700, and that $6,700 stayed in overhead. One balance, read once, tells you the rate or the utilization assumption is off.
Say that same rate was built assuming the machine gets charged to jobs 200 days a year. Over twelve months it only gets charged for 140 days. The rate itself was fine, and recovery still comes in at 70 percent. So 30 percent of that machine's annual ownership cost stayed in overhead. Two causes give the same answer. Either the machine really is idle 60 days more than assumed, which is a fleet size question. Or those days happened and nobody recorded them, which is a field reporting question. The fix is different for each, and you can't tell them apart without the count.
HOW THE CHARGE GETS ONTO THE JOB.
Owned iron goes on days on site, consumption based equipment goes on hours operated, and small tools go on a percentage of job labor cost. The choices get documented, so the treatment is the same on every job and every year. That's what makes two jobs comparable. If you change the basis mid year and don't record it, the trend line stops meaning anything.
Machine, job, and either days on site or hours operated go on the same daily or weekly document the crew already submits, and it's required. This is the whole install. Once the field data exists, the charge, the account, the variance, and the job margin are all math. Until then they're guesses.
Charges to jobs credit one equipment account, and real ownership and operating costs debit the same account. The balance at month end is the over or under recovery in one number. It goes into the monthly close and the CEO report. A number that appears every month gets managed. A number somebody has to go and build doesn't.
Every month the balance gets read and attributed to one of three causes: the rate, the recorded days, or a repair that belongs to a different period. Once a year the rate gets rebuilt with the real days and the real costs from the closed year, so it stays accurate. The true-up is also where you find out the fleet is too large for the work. If a machine can't recover its own cost over a full year, that tells you about the fleet.
THE OUTPUTS, NAMED.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. We don't bill by the hour, and we don't do payroll. The one-time onboarding fee is in the table.
Built for subs doing $1M to $12M. Above $12.5M we quote.
| Last 12 months revenue | Core | Strategic | Platinum | One-time onboarding |
|---|---|---|---|---|
| Under $1M | $1,900 | $3,100 | $3,300 | $2,500 |
| $1M to $3.5M | $2,600 | $4,100 | $5,300 | $4,500 |
| $3.5M to $6.5M | $3,800 | $5,900 | $8,300 | $6,000 |
| $6.5M to $9.5M | $5,100 | $7,600 | $11,800 | $7,500 |
| $9.5M to $12.5M | $6,100 | $8,900 | $14,900 | $9,000 |
| Above $12.5M | Quoted | Quoted | Quoted | Quoted |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers, and it moves with your revenue band. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Just want the setup? Onboarding only is the same onboarding work with no monthly service after it, one time, at the onboarding fee plus $2,000. Start a monthly engagement later and $2,000 counts toward it. It starts at $4,500, and the price for every band is on the pricing page.
The three tier columns are the whole price. Which one fits depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
- Online software only: QuickBooks, Sage, Viewpoint and similar. No VPN or hosted desktop.
- Not in any tier: payroll, pay applications, collections on receivables.
- Pricing valid through 2027.
CFO work. Your own bookkeeper keeps doing the books.
We build your plan every month. Your team does the work.
You get the CFO work: job costing built to match the way you estimate, a 13 week cash forecast, WIP every month, and a monthly meeting that ends with decisions.
Your bookkeeper still does the books.
Core, plus bookkeeping and bank reconciliations, plus job costing and WIP software set up and managed for you. Use your own online accounting software or we supply it, one price.
We build the plan, track it and adjust it every month.
We only work with trade subcontractors. We know what to look for, and we fix problems while they're still small. Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we pay for it.
Our team does the bookkeeping and the reconciliations. We don't do payroll.
Strategic, plus a controller who handles payables and receivables the way an in-house controller would. You approve every payment.
We manage the money side for you, every week.
Everything in Strategic, plus our team does the controller work. We handle your bills and receivables the way an in-house controller would: we call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
Our team does the payables and receivables. We don't do payroll, pay applications or collections.
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PART 3 OF 6, TO WATCH.
Never Miss Payroll Without Taking On Debt is a 6 part series on making payroll out of work you already did, without a line of credit. One of the sessions covers this:
Your Equipment Is Losing Money, and It's Not the Maintenance Bill
A rate built on what you paid recovers enough to own a worn out machine. It doesn't buy the next one.
It plays on this site, and you don't sign up for anything.
