In an earlier post, we introduced the two types of pricing models that are popular in the HVAC and plumbing industries – traditional pricing (time + material cost), and the flat rate pricing model. 

What is HVAC flat rate pricing? As a reminder, the flat rate pricing model charges a set price for a job, regardless of how long it takes to complete.

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The method takes your costs into account and sets you up for a healthy profit. By using flat rate pricing you can eliminate questions from the homeowner and improve customer satisfaction. It provides transparency and is easy to understand when it appears on an invoice. 

The HVAC Flat Rate Pricing Formula

Flat rate pricing is calculated by taking an average repair time into consideration. This allows you to provide a price upfront.

The standard flat rate pricing formula looks like this:

(Your Hourly Rate x Repair Time in Hours) + (Part Cost + (Part Cost x Part Mark-up)) = Repair Price

Estimating the repair time for common repairs can be tough. Luckily, companies like Profit Rhino have done the work for you with thousands of common repairs already priced out. And by using an HVAC flat rate pricing software, you can ensure that you are pricing correctly every time. 

Payzer partners with Profit Rhino to offer an integrated flat rate book to customers with automatic updates in HVAC services, plumbing, and electrical price books. 

Flat Rate Pricing Example

Let’s dive in and see an example of how you might price an HVAC job using the flat rate pricing structure. For our example, we’ll use the following numbers: 

• Hourly rate: $175
• Repair time: 2 hours
• Part cost: $199
• Part Mark Up: 30%

Now let’s plug in the numbers into the formula. That leaves us with: 

(175 x 2) + (199 + (199 x .30)) = Repair Price ($608.70)

Once all the numbers are entered and calculated, the flat rate repair for this job totals $608.70. Using this model allows you to provide an upfront estimate to the homeowner with full transparency, no matter how long the job might end up taking. 

Customer & Business Benefits of Flat Rate Pricing 

If you’re wondering if flat rate is right for your business, let’s check out the benefits for both you and your customers. 

Customer Benefits

Customer service is key for your HVAC business and it’s clear that customers prefer flat rate for a few reasons. 

• Transparency – One of the main advantages of flat rate pricing is that it provides customers with transparency and predictability when it comes to the cost of a service or product. 
• Build Trust – With a fixed price, customers know exactly what they can expect to pay, which can help to build trust and establish a sense of value for the service or product being provided.

Business Benefits

Flat rate pricing doesn’t only benefit the customer, it is also a preferred method of pricing for HVAC businesses too! 

• Predict Revenue and Manage Resources – By charging a fixed price, businesses can ensure that they are able to cover their costs and increase profit, even if it takes longer to complete the job or requires more resources than anticipated.
• Manage & Update Pricing – As the cost of materials and services can change over time, it’s important for businesses to be able to easily adjust their prices to reflect these changes.

Partner with Payzer

The day-to-day logistics of running an HVAC company can be challenging and time-consuming as a business owner. Payzerware makes it easy to run your HVAC business by saving time in all aspects of your business by streamlining operations, improving collections, and helping you get to more jobs.  The all-in-one field management software platform that combines software and support to help you grow your business. 

And, it integrates seamlessly with a flat rate price book powered by Profit Rhino, a flat rate software used by heating and air conditioning companies. With automatic updates and access to pricing at your fingertips without leaving the system, Payzerware is positioned to help you earn more money and grow your business. 

Click here to talk to a product specialist and see how Payzerware will benefit your business.