Flat Rate  Hourly Rate Billing

There are two standard billing methods RV service centers use for labor: flat rate billing and hourly rate billing.

FLAT RATE BILLING uses accepted standards for billing service time. Under flat rate billing, the work is billed based on the time required to do the job as determined by time-study surveys of trained and experienced technicians from service shops across the country. The results are tallied and averaged (to set a standard time to do the job) and published. The published flat time rate is then used to set labor charges for each job. The advantage of flat rate billing is you pay a set amount regardless of the actual time spent for each operation. You will pay only for a reasonable amount of labor time a competent technician would need to complete the work. This is very fair.

HOURLY RATE BILLING charges for each job based on the actual amount of time utilized to do the job. Using this method, no two jobs are billed the same. For example: Assume the shop labor rate is $60 per hour. If technician A takes two hours to perform the work, the charge for his labor would be $120. If technician B takes 4 hours to complete the same job, his labor charge is $240. As a customer, you would be billed twice as much if you were unfortunate enough to get technician B even though the same service was performed. 

Many hourly billing service shops maintain a low hourly rate but double or even triple the time required to do the job based on standard flat rate times. Even a shop with a $100 posted labor rate could be the better buy for service work. If the job is billed at $60 per hour and takes twice the flat rate time, that’s effectively $120 per hour! The flat rate billing shop would have charged only $100. The higher posted labor rate service shop actually costs less!

Before you judge service costs, be sure you know how the service shop bills for most service work.