| Breakthrough the Charging Barrier With Hourly Fees by Donnie Cruse Fair and equitable return is about creating breakthroughs. It is having the confidence and the resources to request fair compensation for services. It is the understanding of the value of your service. Many years of attention and fact finding have lead to this upcoming series of articles. In this three part series you will read about four standard methods of invoicing. The four methods used to calculate towing/recovery services are; Hourly Fee, Task Fee, Contract Fee and Price Per Pound. Before reading these articles I invite you to recall the great words of Samuel Adams, "we are who we were." Everyone makes conscious decisions about their invoicing procedures. Invoicing techniques are varied and may combine different segments of other methods of charging. If what you are doing is getting you what you want, then continue to do what you are doing. The most common method used is hourly. This is the oldest method and it is the simplest to tabulate. This study did not research the means by which hourly fees are arrived at. However, it is apparent that it is based on the local market competitiveness. As the industry began refitting itself with hydraulic units, it became obviously clear that normal hourly fees were much too low. This was validated with the advent of computers that readily illustrated actual costs of operation. Much of the credit goes to Jim Weaver and his passion to identify actual cost to operate and the P&L sheet. In a very short time we witnessed average hourly fees rise from $75-$95 per hour towards $300 or more. There was little doubt that these newer units required a higher hourly fee. These factors combined with their ability to complete the jobs much faster caused customer comments to become defensive. "Hey, it only took you…" and "you got it out with your old truck and it never cost me that much". These comments although true do not reflect the entire picture. These new units were also needed to service the customer's newer style trucks. Many towing companies overlooked the need to substantially increase the regular towing fees during this period and the “recovery” rate became the focus to service the new truck's debt. This higher hourly fee quickly became a major issue. Insurance and trucking companies alike knew the capital costs of equipment and fought these high hourly fees for recovery work. On the grand scheme of things these new recovery trucks were clearing accident wreckage much faster yet their new rates were constantly challenged. In retrospect, the industry may have been able to educate the commercial sector in a more responsible manner if it had foreseen this issue sooner. If the hourly fee is your chosen format, here are a few thoughts that may assist you; A national study since 1998 has concluded that recovery fees charged hourly are quickly becoming a thing of the past. The study's conclusion is based upon collection and documentation of recovery invoices. Contract Fees This is the era of information. Choose information as your strategic ally before entering into contracts. Contract fees are the result of submitting a bid to provide services to police, government agencies, auto clubs or commercial accounts. Many creative methods are employed to acquire these contract agreements. Choosing the one you want to service can be a rewarding but strenuous task. It may be in your best interest to attend city hall meetings to learn the issues that are predominate in the minds of council members. You may discover the council opposes waiting time or dollies fees. This is a simple matter of softening these charges and increasing winching fees or clean-up fees. It is an issue that requires evaluation time and investigation to be the successful bidder. This all equates to the "book of business" that you want for your towing firm. A wise man once said "incrimination before thorough investigation will only lead to poverty and ignorance". Any profitable "book of business" requires thorough and complete examination before entering in to it. When a towing service contract is awarded to your firm, it is imperative that each and every person on your team is thoroughly informed about the fees associated with the contract. Do not assume they know the rates. Use invoice examples and test-drive it before they write their first contract invoice. Usually each inquiry/complaint from the agency is recorded and could be a determent during the process of renewing your contract. I trust this article will add to or compliment your invoicing procedures. Donnie Cruse is the founder and President of WreckMaster, the industry's leading training organization. Donnie has over thirty years experience in the Towing and Recovery Industry and has taught his techniques in Hong Kong, United Kingdom, South Africa, United States and Canada. Numerous city libraries house his reference materials and he is recognized as an Expert Witness. |
  The recovery of a pick-up over-the-wall can be time consuming. Figure the job accordingly. Don't short change yourself.  Tower writing out his invoice based on an hourly fee. |
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