Am I being overcharged?

[kranky]

We have an agreement with a company to fix our printers on an on-call basis. The agreement says we pay an hourly rate for service (1 hour minimum) and for travel time from their office to ours and back. A normal one-way travel time is 45 minutes, so for one service call we typically get billed 1.5 hours of travel.

Our auditor says that if the tech is not traveling back to their office, but instead is going to another call, then we should not have to pay the 45 minute return travel. He says we should only pay for the actual amount of travel time to get to the next call.

He says that if every customer pays for the time to go to and from their home office, they can end up billing a total of over 15 hours in service and travel a day! Basically every service call bills travel time to two customers at the same time except the first and last of the day.

Call 1 - 45 minutes to site, 30 minute fix time, bill 1.5 hours travel + 1 hour service
Call 2 - 10 minutes from call 1 site, 1 hour fix time, bill 1.5 hours travel + 1 hour service
Call 3 - 20 minutes from call 2 site, 30 minute fix time, bill 2.0 hours travel + 1 hour service

You get the idea. That's 8 hours of stuff billed and it's not even lunchtime yet.

I said that although we are obviously paying more than the ACTUAL travel time, the agreement says we have to pay for the travel time to and from their home office. Whether they choose to travel it or not, I can't control.

I'm well known as being cheap with company money, so the auditor is very suspicious of why I'm not fighting this. But I think the wording in the agreement is clear and I don't have a leg to stand on.

 

[BigJ]

I think the only solution would be to work at a new contract once this one is up.

 

[Dulanic]

Many companies do this, when I was a fieldservice tech it was the same way. We always charged the same, from home office (which we didnt have one in that area, so we used my home to calculate travel), both there and back.

 

[olds]

The agreement says we pay an hourly rate for service (1 hour minimum) and for travel time from their office to ours and back

/thread

 

[Kelemvor]

Originally posted by: oldsmoboat

The agreement says we pay an hourly rate for service (1 hour minimum) and for travel time from their office to ours and back

/thread

Exactly. If the agreement specifically states that, then there's not much you can do until it's time to mak ea new agreement. But how would you know where they just were and where they are going next? They don't have to provide that information to you. Billing it form the office each time is at least a common number so you know what it will be.

Might be better to work out something that they only change you an hour or so because on average they'll probably be coming from somewhere before and going to somewhere after so an hour might be a bit more reasonable.

 

[crystal]

What happen if the next site is across town and it takes them more time to there? Would the next site be willing to pay the extra hrs? i.e.

Site A <---- 1.5 hr ------ Office -------- 2 hrs -------> Site B. (take about 3.5 hr to get from A to B)

 

[Zorro]

Kranky

You should look for a new auditor.

 

[woowoo]

Call the auditor when the printer breaks.
Or buy a spare printer and use a local drop off service place.

 

[skyking]

Are these your printers? If so, then you can have any company fix them. Unless they are really good or the only show in town, drop them like a hot potato.

 

[Phoenix86]

Originally posted by: krankyThe agreement says we pay an hourly rate for service (1 hour minimum) and for travel time from their office to ours and back.

Do they actually travel back to their office or to another call?

If they have to make a trip *just for you* that's when the trip charge to and from should apply.

What's the exact wording on the contract for this?

edit: This isn't a /thread kinda of thing. The exact wording is important. If the contract says when they travel to and fro a trip charge is required then actual travel has to happen. If it says each call will have a to and fro charge, it's open and shut.

 

[kranky]

The exact wording of that section is:

Service charge of $X per hour (minimum one hour) will apply. A travel charge of $X per hour is assessed for each site visit and a service call may require more than one site visit. Travel charge is based on the round-trip time required to travel from <repair company> to customer site.

 

[Leper Messiah]

Originally posted by: kranky
The exact wording of that section is:

Service charge of $X per hour (minimum one hour) will apply. A travel charge of $X per hour is assessed for each site visit and a service call may require more than one site visit. Travel charge is based on the round-trip time required to travel from <repair company> to customer site.

there you go then. If its that much of a big deal, then re work the contract when that time comes. I think its SOP in most on-site service industries to do that though.

 

[Zee]

you do look like you are correct and just reword the contract or get another one when the time comes

 

[Phoenix86]

Originally posted by: kranky
The exact wording of that section is:

Service charge of $X per hour (minimum one hour) will apply. A travel charge of $X per hour is assessed for each site visit and a service call may require more than one site visit. Travel charge is based on the round-trip time required to travel from <repair company> to customer site.

Then actual travel seems required as they are measuring in hours traveled not a flat travel fee.

 

[spidey07]

Originally posted by: kranky
The exact wording of that section is:

Service charge of $X per hour (minimum one hour) will apply. A travel charge of $X per hour is assessed for each site visit and a service call may require more than one site visit. Travel charge is based on the round-trip time required to travel from <repair company> to customer site.

Well that's pretty straight forward. Not much you can do but re-negotiate.

-edit- oh, and your auditor is a moron (like most are) if he couldn't understand this

 

[Leper Messiah]

Originally posted by: Phoenix86

Originally posted by: kranky
The exact wording of that section is:

Service charge of $X per hour (minimum one hour) will apply. A travel charge of $X per hour is assessed for each site visit and a service call may require more than one site visit. Travel charge is based on the round-trip time required to travel from <repair company> to customer site.

Then actual travel seems required as they are measuring in hours traveled not a flat travel fee.

I think you're missing the point. ALL travel time is point A to point B. Point is the company headquarters. Point B is the business they are servicing. Clear and simple.

 

[Phoenix86]

Originally posted by: Leper Messiah

Originally posted by: Phoenix86

Originally posted by: kranky
The exact wording of that section is:

Service charge of $X per hour (minimum one hour) will apply. A travel charge of $X per hour is assessed for each site visit and a service call may require more than one site visit. Travel charge is based on the round-trip time required to travel from <repair company> to customer site.

Then actual travel seems required as they are measuring in hours traveled not a flat travel fee.

I think you're missing the point. ALL travel time is point A to point B. Point is the company headquarters. Point B is the business they are servicing. Clear and simple.

Yeah, looking at it closer and it does state where A and B are, so yeah gotta pay round trip every time.

edit: you know, this is pretty standard practice, why is the auditor confused about this? First company they have audited with this kind of service charge??? 😕

 

[kranky]

The auditor understands it, he just doesn't like it. He feels that it's wrong to charge for travel time when no traveling is being done, and that we're being overcharged unfairly.

So he wants me to complain to the vendor, and then he can be a hero for pointing out why the numbers weenies should be in charge of negotiating all service agreements, as clearly I'm not competent to do it. 🙂

I've been doing this a long time and every on-call agreement has similar language. The advantage to me is that I have a fixed travel charge. The auditor hasn't considered that we might have a service call one day when the tech is 200 miles away. When that happens, I'd be real happy I'm not paying actual travel time.

And I know that if we leaned on the vendor or any vendor over this issue, we'd find that on every future service call, the tech would just happen to be very far away when we logged the call. We'd end up spending the same or more.

Some things aren't worth going to the mat over.