The example company
Example assumptions
- 20 technicians, each with 1,140 billable hours a year.
- An hourly rate of $118 and monthly billing of $225,000.
- 8 work orders per technician a week, 48 weeks a year.
- A paper work order takes 8 more days to reach invoicing than a digital one.
These assumptions only show the math; they do not come from any study. Replace each one with yours.
The 1,140 hours and the $118 come from the example in what a technician hour really costs.
Cost 1. The days until you get paid
The paper work order rides around in the van, waits in a tray and someone checks it before invoicing. In the example, that adds 8 days to the billing cycle.
$225,000 a month ÷ 30 days × 8 days = $60,000
That is $60,000 of working capital permanently tied up. It is not a loss, but it is financing you give your customers without charging for it.
Cost 2. The hours that never get recorded
This is the big one, and nobody sees it. A work order filled in from memory at the end of the day rounds the hours, and it usually rounds them down. In the example we use a 15% gap.
20 technicians × 1,140 h × 15% = 3,420 h a year 3,420 h × $118 = $403,560
Those are hours that were worked and never billed. It is not about charging more: it is about charging for what you already do.
Cost 3. The admin work
Someone types into the system what is already written on paper. With 20 technicians and 8 work orders a week each:
160 work orders × 3 min = 8 h a week 8 h × 48 weeks × $28 = $10,752 a year
On top of that comes the time spent chasing missing work orders and calling technicians to ask what they meant. It is almost never measured, and it can take up a good part of someone’s day.
Cost 4. Incomplete work orders
A work order with no parts listed, no signature, no hours or unreadable handwriting leads to a phone call and a delay. And sometimes to a line item that never gets billed, because nobody is sure.
160 work orders × 48 weeks = 7,680 a year 7,680 × 30% incomplete = 2,304 work orders 2,304 × 20% with a lost line item × $50 = $23,040
The 30% and the 20% are example assumptions. Count yours with one week of work orders.
Cost 5. What you cannot defend
Without a photo or a signature, you lose the argument about whether the job was done, or done well. There is no easy figure for it, but each of those arguments costs an invoice or a bit of trust.
The full math
| Item | Per year |
|---|---|
| Unbilled hours (15%) | $403,560 |
| Admin retyping | $10,752 |
| Line items lost on incomplete work orders | $23,040 |
| Identifiable total | $437,352 |
| Working capital tied up (not an expense) | $60,000 |
This is an example company. Adjust it to your size: the biggest item is usually the same one, the hours that never get recorded.
How to do your own math in one afternoon
- Ask two technicians to use a timer for two weeks.
- Compare those hours with what they would have written down from memory.
- That percentage, applied to your whole team, is your biggest item.
- Time how long it takes to retype ten work orders, and multiply.
- Count the incomplete work orders in one week.
Nobody argues with their own numbers. And the math above leaves out the most expensive part: the customer who does not renew because you could not show them what you did.
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