Flat rate or time and materials: measure before you argue
Both pricing models can work; the failure mode is not knowing which one is working for you. Flat rate sells certainty and rewards fast techs, but a stale price book misprices every task the moment parts costs or wages move. Time and materials can never lose money on an hour, yet it caps the upside on your best techs and invites invoice disputes. The measurement is identical either way: gross margin per job, with the tech's true loaded hour and the parts actually consumed charged against the ticket.
| What to watch | Flat rate | Time and materials |
|---|---|---|
| Where margin hides | Task times and parts assumptions in the price book | Unbilled hours and small parts never invoiced |
| The discipline required | Reprice the book whenever wages or supplier costs move | Tight time capture from dispatch through to invoice |
| The telling number | Margin per task code, per tech | Realized rate per billed hour |
We rebuild the price book from your own data: the loaded cost of a tech hour including the truck, insurance, benefits and the unbillable driving between calls, then margin targets by task. Most owners discover a handful of popular tasks priced below their own cost, and a few underpriced ones quietly carrying the company.
After-hours work: premium or illusion
Emergency calls look lucrative until they are costed honestly. Overtime in Ontario runs at time-and-a-half after 44 hours in a week, on-call coverage has a price whether or not the phone rings, and 2 a.m. work carries more callbacks than the Tuesday-morning kind. So we track after-hours as its own line of business: its revenue, its labour at true cost, its callbacks, its margin.
Sometimes the verdict is that the premium needs to rise before the pager goes out again. Sometimes nights are genuinely strategic, the calls that create loyal daytime customers, and the right move is a dedicated rotation instead of burning out your best tech. Either way the decision stops being a feeling.
Service cash and construction cash move at different speeds
Service work collects at the door. Construction pays on progress draws, thirty to sixty days behind the work, minus a 10% holdback that can sit until the lien period clears. Take two builder contracts without modelling that lag and the service trucks quietly start financing the construction division, right up until a payroll Friday gets uncomfortable.
A 13-week cash-flow forecast makes the lag visible in advance: draws and holdback releases on one side, payroll, remittances, supplier terms and truck payments on the other. From there the strategic question gets answered with numbers, how much construction the balance sheet can actually carry, and what a builder contract must pay to be worth the wait compared with another service truck on the road.
The monthly numbers a plumbing company should see
- Billable efficiency: hours invoiced against hours paid, per tech and per truck.
- Average ticket and margin by call type: drain, repair, install, emergency.
- Revenue and gross margin per truck: the unit economics of adding the next one.
- Membership and recurring revenue: how much of next month is already sold.
- Cash runway: the 13-week forecast against payroll, HST remittances and supplier terms.
None of this requires new software. It comes from the dispatch data you already collect, joined to clean books, and reviewed in a monthly working session where decisions actually get made: pricing, hiring, the fourth truck, the builder bid.
A CFO with a lender's eye
Growth in this trade is financed: vans, jetters, a shop with a yard. Walla Assaf spent a decade in banking and corporate finance before founding Tauro, which means the forecast and the file get built the way a credit officer reads them, debt service laid against the 13-week cash view rather than against optimism. Our Fractional CFO service runs the monthly rhythm, and Business Financing Advisory steps in when the next trucks or the shop purchase need a lender at the table.
Engagements are quoted in writing after a free 15-minute discovery call, and we work with plumbing companies across Mississauga and the GTA, from two trucks to twenty. The goal is a business you steer by instruments, not by the balance in the operating account.
