Calculating Job Profitability for Fixed Price Service Jobs

Fixed price billing is commonly used when offering a specific service at a set rate, regardless of the time or materials required to complete the job. This model provides customers with a predictable cost and helps businesses maintain clear, upfront pricing.

With Zuper’s Job Costing feature, you can easily add fixed price services to a job and accurately track the associated costs, such as labor, parts, and other expenses. This guide walks you through the process of adding a fixed price service to a job, understanding the cost breakdown, and reviewing the profit.

Prerequisite:

Ensure you have created a service in the Master Parts and Service module and set the Unit Selling Price for the service. Refer to the Create Parts, Products, & Services guide.

Let’s add a fixed price service to a job and calculate profitability!

1. Go to the respective Job Details page.

2. Add a fixed price service in the Line Items: These include the price of all products, parts & services added to a Job.

3. On the Job Detail Page, locate the Line Items section.

   • On the Parts & Services tab, click + Add and select the Line Item.

     

   • In the Product Type field, choose Service.

     

   • Select the relevant service (e.g., Water Heater Installation) from the list. If you want to add more parts, products, and services, add to it.

     

   • Click Add Product to include the service in the job.

     

4. Labor tab: Displays the internal labor cost based on the actual time technicians spend on the job. This cost is calculated using each technician’s fully loaded hourly rate, the number of hours worked, and the assigned Cost Code (such as Regular, Overtime, Double Time, or Holiday).

   
   • If the Timelogs feature is enabled, Zuper automatically captures the time spent on the job. If Timelogs is disabled, you must manually add time entries by clicking + Add in the Labor tab.
   • You can also update the Cost Code for a technician by editing their time entry. When a Cost Code is changed, Zuper creates a new line item instead of modifying the existing one, which helps maintain a clear audit trail of labor cost changes.

Note: If your organization is using the Timelog feature, you cannot delete a labor line item directly if it was created through a time log. To remove such a labor line item, first delete all related time logs for that technician within the job, and then delete the labor line item. This ensures corrections can be made when a technician logs time against the wrong job.

If Timelog is not enabled, you can delete labor line items directly from the job.

5. Expenses tab: Add job-related expenses (e.g., travel costs) if the Expenses setting is configured.

   

Review Job Profitability

Once line items, labor hours, and expenses are added, Zuper calculates job costs and profitability automatically. Check the Job Profitability Bar at the top of the Line Items section on the Job Detail page.

Note: Visibility of cost breakdowns depends on your Job Costing Permissions settings. Refer to the Job Costing Permission article for more info.

Here’s a detailed breakdown of profitability for a Water Heater Installation job billed using the Fixed Price method in Zuper:

Total Price (Revenue): +$1,200
This is the fixed price agreed upon with the customer before the job began.

Total Job Cost: -$444

Component	Details	Cost
Parts & Services	Water Heater Installation	-
Labor	Technician Shawan Edward worked 6 hours at $69/hour	-$414
Misc. Expenses	Travel fuel expense	-$30
Total Job Cost:	$0 (Parts) + $414 (Labor) + $30(Misc.)	$444

Profit:

$1,200(revenue) − $444(total job cost in system) = $756 profit

Profit markup: $170.3%

FAQs

1. Can I specify a Price Code for a Fixed Price service?
   Price Codes are not applicable to Fixed-Price services in Zuper, as the entire job is billed at a flat, predefined amount.

2. Should I create a separate category for labor services?

   Yes, we recommend creating a “Labor” category to help distinguish labor-related services from other parts or materials. This improves clarity in reporting, job costing, and service management.
   To create or manage service categories:

   Go to: Settings > Modules > Parts and Services > Category Settings.

3. Should I specify the Unit Purchase/Cost Price when creating a fixed-price service?

   When creating a fixed-price service (e.g., AC Installation), do not specify the Unit Purchase/Cost Price. In Zuper, labor costs are calculated separately based on technician hours and are not tied to the service item itself.