Itemizing materials

[JoeNorm]

When performing T&M work is it necessary to list out every material to the customer in the invoice? I have noticed most contractors do this but it seems extremely tedious and time consuming.

Or cans you just put a line item for "materials used"? Is this just about trust with the client?

thanks

 

[hillbilly1]

The software I use automatically adds it ever time I add a part, that way I’m not giving away material. If I don’t add it, I’m losing money.

 

[infinity]

It really depends on what your customer will accept. Many don't want an itemized invoice because it doesn't mean anything to them. If I could get way with not writing out the entire list I would just use:

Time = $XXXX.XX
Material = $XXX.XX
Total: $XXXX.XX

 

[James L]

I think it depends on the situation and the price you're charging for materials. I typically charge double retail.

If I go add a couple circuits and GFCIs in a basement, the materials could easily be billed at $500-600

On a short call with a lot of expensive pieces, they could have real sticker shock with just a lump sum

 

[readydave8]

I used to carefully list materials with individual prices, I think made customers think I was honest and meticulous

Rarely do now, usually just total for material, and if I do itemize, usually leave individual prices off customer copy

I know I'm honest and meticulous, sincerity goes a long way in what has become 1-man shop

 

[JoeNorm]

I think it depends on the situation and the price you're charging for materials. I typically charge double retail.

If I go add a couple circuits and GFCIs in a basement, the materials could easily be billed at $500-600

On a short call with a lot of expensive pieces, they could have real sticker shock with just a lump sum

Won't it be sticker shock either way?

 

[James L]

Won't it be sticker shock either way?

I think it depends.
If you have a pretty long list of small materials, at least they can see how it adds up. Seems to be less justifying, imho

 

[TechDog]

I use both.
I show important/expensive devices in detail and cover the little stuff with a single materials line item.

 

[hbiss]

I used to carefully list materials with individual prices, I think made customers think I was honest and meticulous

More than likely it gives many fuel to dicker about your prices compared to what they can get something for at Home Depot or on-line. My advice has always been never itemize materials. Always do what Infinity says.

-Hal

 

[LarryFine]

Unless requested, my line items include materials, except for customer-provided equipment.

 

[readydave8]

More than likely it gives many fuel to dicker about your prices compared to what they can get something for at Home Depot or on-line. My advice has always been never itemize materials. Always do what Infinity says.

-Hal

I always worried about that but don't remember any times it happened, maybe I wasn't marking up enough

 

[readydave8]

Oh I do remember one time, he was a builder and seemed satisfied when I explained

 

[goldstar]

When performing T&M work is it necessary to list out every material to the customer in the invoice? I have noticed most contractors do this but it seems extremely tedious and time consuming.

Or cans you just put a line item for "materials used"? Is this just about trust with the client?

thanks

Tough question to answer with a short explanation. So, here's my attempt. If it's a small job with few materials there usually isn't a problen listing what materials you used. If it's a larger job you'll have to keep track (somehow) of what materials you used (maybe using an Excel spreadsheet). On this type of job you may be asked by your customer to justify the amt. of $$ you charged for materials - then you can produce the spreadsheet if needed. On a typical job that you do regularly (like a service upgrade) you can give a quoted total and agreed on price and be done with it.

Now, this is something that several accountants told me about if you are in a State that charges sales tax, but it's something I don't regularly practice. When I pick up materials from the supply house or big box store I pay the sales tax up front. I then mark-up the materials and charge my customer accordingly. If you itemize your invoice you are SUPPOSED to charge sales tax on the difference of what you paid and what you charged. Who does that ? Sounds ridiculous but if you ever get audited by the State you may end up having to pay those sales taxes you didn't collect on.

 

[goldstar]

I think it depends on the situation and the price you're charging for materials. I typically charge double retail.

I wish I worked in your area if you are able to charge double retail without push-back. Electricians in my area often cut each other's throats. I'm lucky to get 20% mark-up on materials.