Field service

The hidden cost of paper work orders

Paper costs nothing. What costs money is everything that happens between the technician filling in the form and the cash landing in your account. Here is the math for an example company with 20 technicians, and how to do yours in an afternoon.

In this article
  1. The example company
  2. Cost 1. The days until you get paid
  3. Cost 2. The hours that never get recorded
  4. Cost 3. The admin work
  5. Cost 4. Incomplete work orders
  6. Cost 5. What you cannot defend
  7. The full math
  8. How to do your own math in one afternoon

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

ItemPer 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

  1. Ask two technicians to use a timer for two weeks.
  2. Compare those hours with what they would have written down from memory.
  3. That percentage, applied to your whole team, is your biggest item.
  4. Time how long it takes to retype ten work orders, and multiply.
  5. 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.

Last updated:

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