equipment rate management

Equipment Rate Management Seminar

A one-day seminar that provides contractors with equipment intensive operations, the knowledge and the tools needed to accurately develop and maintain internal charge rates, estimating rates and billing rates for every machine in their fleet.

Setting accurate equipment charge rates is one of the most important management chores in a construction company. It's also one of the most difficult.

If you set equipment charge rates too low, you won't recover the true cost of owning and running your fleet - so job profits will be wiped out by equipment losses. If you set them too high, your cost estimates will be too high and your bid proposals won't be competitive - so you will lose work, cover less overhead, and generate less profit.

To do it right, you must have three things in place:

• Know-how. You need to know exactly how to build charge rates so they reflect your particular approach to equipment management, equipment cost accounting and job cost estimating.
• Data. You need baseline cost data and an equipment accounting system that enables you to collect and track your particular equipment cost and employment patterns.
• Tools. You need a tool set that enables you to quickly transform raw equipment data into charge rate value and fleet composition change information.

Because, until now, those things were hard to come by, most civil works contractors turned to "industry average" or equipment rental house rates. But that is risky business. Your company's fleet, equipment management and accounting practices are unique. Job specific costs like mechanic's wages, fuel and wear vary greatly from job to job. Using "industry average" or rental house charge rates won't account for those differences.

Discover Grantlun's Equipment Rate Management Seminar

Now, all three things you need to set and maintain accurate equipment charge rates are easy to put in place:

Know-how

The Equipment Rate Management Seminar walks you through the principles and best practices involved in equipment charge rate development.

• The 3 types of equipment charge rates.
• How charge rates relate to accounting and estimating practices.
• Charge rate architecture and elements.
• How to accurately estimate your cost for each element.
• Ways to establish the proper market value of your equipment.
• Ways to recover equipment management overhead.
• Ways to recover equipment related job overhead.
• How to forecast usage of your construction equipment.
• How to establish the best fleet composition.
• Whether to rent or buy.
• How to track your actual heavy construction equipment costs and usage.
• How to audit and maintain charge rates.
• And much more...

Data

With the advice and tools provided at the seminar, you can build your first set of charge rates using commercially available data; and, then adjust and maintain them using cost and employment data collected by your accounting system.

Tools

The collection of workbooks, worksheets and guidelines transforms the seminar content from interesting and potentially valuable ideas into immediately useable and relevant tactics that will revolutionize the way you run your business. The Equipment Rate Management Toolset includes:

Equipment Charge Rate Workbook. A Microsoft Excel workbook that contains 17 worksheets that make charge rate development easier and more accurate. For a detailed explanation of each of the worksheets, download the Overview.

Equipment Charge Rate Workbook Overview Document Click to Download

• Stores historical data. All of the pertinent information for each machine in your fleet is located in one easy-to-access, easy-to-update location.
• Performs key calculations. By inputting basic data, you'll end up with accurate internal charge rates, estimating rates, and, billing rates for each machine in your fleet.
• Audits charge rate accuracy. The workbook automatically indicates when charge rates need to be raised or lowered to better match cost experience.
• Audits fleet composition. The workbook automatically makes buy, sell or hold recommendations for each machine in your fleet, based on limits that you set.

Equipment Fuel Consumption Rate Worksheet. A Microsoft Excel worksheet that calculates fuel consumption for any engine of known horsepower and utilization level.

Chart-of-Accounts and Price Breakdown Structure Mapping Worksheet. A Microsoft Excel worksheet that enables the mapping of each cost account to the Price Breakdown Structure used to develop job prices. It eliminates gaps and overlaps in job and equipment cost estimating.

Buy-Lease Analysis Worksheet. A Microsoft Excel worksheet that enables analysis of buy and lease terms for machine acquistion. It enables the selection of the least cost option.

Grantlun provides business management training & construction management seminars in subjects central to successful construction enterprise management.