How to Handle Trip Charges for Service Calls

July 5, 2012

Q: I’m going back and forth with our customers and accounting department over trip charges for service calls. How do other NSCA members handle this?

A: There are several common methods and practices used. Some work better in larger markets, others work better in a more rural setting. Another factor to consider is that the customer may have limits on mileage charges. Here’s a few examples of the most common methods used.

A fixed rate or flat fee for a trip charge within a radius of the service facility. This option allows for more flexibility in running several calls, picking up materials, etc. without needing to track mileage and account for each client separately. This is added on to the actual labor charge (time and materials used).
An actual mileage-based trip charge. This requires you to calculate each service call as if it was a round trip from the shop. Typically the contractors use the latest IRS reimbursement amount as the basis for the mileage charge (55 cents per mile in 2012). You need to have you’re billing or payables clerk verify the mileage on each ticket to make sure you never exceed the actual distances. This too is added on the labor and materials used.
A discounted labor charge. Many of our members do a reduced rate for driving time, or charge just one way to keep their clients from paying for them sitting in traffic. It’s also quite common to have a minimum fee to “roll the truck”. Even on a “no-problem-found’ service call a minimum charge (2 hours is typical) plus a trip charge or mileage is fairly common.

The complicated part of all this is when the customer dictates a different type of billing method, or they may have their own policy for reimbursing travel time or trip charges. You will need to have a standard policy in place, but be prepared to be flexible when the client demands something different. CW

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