I was wondering if any veterans out there had put some time into what a machine costs to run per hour? Some rates will be variable such as fuel, Maybe you have a gallons per hour? Cat 953 Cat 963B track loader w/3116? Komatsu 300? Or any 30 metric ton machine size? (hydraulic excavator 2.5 yd heaped bucket) Bobcat t-320 or equal sized machine? (t770, case 450, tl140, jd332, cat 277,279,289) d6 sized dozer d4 sized dozer 815 padfoot compactor 84" vibratory padfoot roller 200 sized excavator (20 ton) Dump trucks tandem axle end dumps 16ft box 10 yd (in place/compacted) capacity. (i have heard $40 to $45 per hour on these, with driver) Any help would be appreciated, Thanks!
Your cat salesman can show/give/sell you the "Caterpillar Performance Handbook" i think that's the name - it has operating cost data with all the variables for your operating conditions - should answer most of your questions on your cat equipment. Most of the manufacturers will gladly share ownership and operating cost with you if you own one of their machines. Some even have excel spreadsheets if you are so inclined. Getting a handle on understanding operating cost was a big eye opener for me years ago and i learned some valuable info from those books etc. Good luck!
I found this posted here some time back. I thought it worked pretty well to give a general idea of cost. There will be more factors involved to get your exact number. Anyway, here's the link http://decisivecost.com/Calculator/Calculator1.aspx
I have found that using rental rates, although pretty high if you are putting a bunch hours on annually, is a good way to estimate what you should be charging. The Cat Performance Handbook will give you wonderful information regarding fuel consumption per hour. The most important thing that I have found is to track to the best of your ability EVERY expense for individual machines, and then at the end of the year divide that cost by the hours run. I rent most of the equipment we use as we may need a D6N, 2 730's, and a 336 for one project, and track trucks, 324 long reach, and 320 for the next. I do not have the resources to purchase all of what we need, so I rent most of it and purchase the equipment that we use the most. I created an Excel spreadsheet that helps me determine what the hourly rate of each piece of equipment should be. I tried to attach it here but get the message that it is an invalid file type, so I am copying and pasting to at least show what information is included. Machine 287C 312C 315C 320D 325D D4G D5N D6N D6R Fuel Gal/HR 2.00 3.50 4.00 5.00 7.00 4.00 5.00 7.00 8.50 $/Gal $3.90 $4.00 $3.75 $3.75 $3.90 $4.00 $3.90 $4.00 $3.90 Fuel Total $7.80 $14.00 $15.00 $18.75 $27.30 $16.00 $19.50 $42.61 $33.15 Rent $30.00 $27.84 $46.88 $60.00 $70.00 $20.00 $75.00 $56.25 $50.00 Sales Tax $0.00 $0.00 $2.81 $3.00 $0.00 $1.72 $4.50 $0.00 $0.00 Prop Tax $0.60 $0.56 $0.00 $0.00 $1.40 $0.40 $0.00 $0.00 $0.00 Labor $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 sub total $88.40 $92.40 $114.69 $131.75 $148.70 $88.12 $149.00 $148.86 $133.15 Overhead 20% 20% 20% 20% 20% 20% 20% 20% 20% $17.68 $18.48 $22.94 $26.35 $29.74 $17.62 $29.80 $29.77 $26.63 sub total $106.08 $110.88 $137.63 $158.10 $178.44 $105.74 $178.80 $178.63 $159.78 Profit $10.61 $11.09 $13.76 $15.81 $17.84 $10.57 $17.88 $17.86 $15.98 Mileage $0.65 $4.00 $6.00 $0.00 $3.75 $0.00 $0.00 $0.00 $0.00 Per Diem $6.00 $4.00 $0.00 $4.00 $4.00 $0.00 $0.00 $0.00 $0.00 Total $123.34 $129.96 $157.39 $177.91 $204.03 $116.32 $196.68 $196.50 $175.76 In the spreadsheet I can change any of the numbers (rental rate for example according to whether or not it is a weekly or monthly rental) (fuel price per gallon) and the spreadsheet recalculates the total. Unfortunately I cannot share the actual spreadsheet, but at least this will show you what it accomplishes. The one thing that I am still working on is how to get a good number on overhead. Insurance, all the bloody taxes and permits, etc. etc. etc. that one must have, and how that relates to the cost per hour is the most difficult part for me to determine. I got off of the subject a bit though, for determining the cost per hour of owned equipment you must track what the payments are, insurance is, every dime you spend on maintenance, fuel ,repair etc. and divide by the number of hours. There should also be a component for replacement, and I think that the Cat performance handbook (available for online download now) may address that as well. Hope this helps!
Oh, sorry, when I posted that spreadsheet all the columns got mish-mashed, but maybe you can still get the idea. Obviously I do not posses the IT skills required to do a nice job on this forum, but I'm trying!
I like the spreadsheet oxbow. I will build one of those over the next few weeks as we are in the process of getting all of our numbers together for next year's work. I will add a few more items such as Worker's comp, insurance, etc to get a more realistic hourly cost.
Thanks Responder, I have another to determine what it costs us to pay someone say $26 per hour - add 5.25% for workers comp, 6.12% for unemployment, etc. and then plug that number into the above spreadsheet. Now that you mention it I should have that number automatically entered into the Machine cost spreadsheet. Ah, refining this process will never be done I am afraid.
I try to put back $1 for maint/repair for every $1 of fuel. Works pretty well Pj
That's a good idea! Another dollar per dollar of fuel for replacement would be good as well, although easier said than done. A 320C burns about 5 gallons per hour which is about $18 per hour depending on current fuel prices. If you put 5000 hours on a machine in 5 years that would be what, $90,000? That would be a pretty substantial down payment on a newer machine. $18,000 per year for repair and maintenance should be ample to cover normal service as well as major component replacement. So, the question is can one bank $36 per hour above all other costs? Not easy in this market, but a good goal to have. I am still working on retained earnings of any kind at the end of the year. Starting business in the spring of 2008 (my crystal ball was a bit clouded) it has been a struggle. Our business volume is beginning to pick up now with more repeat customers, so hopefully we will continue to gain on it. Sure makes you wonder why you spend so much time to make so little when you are starting out.
i second oxbows first sentence to the T. "I have found that using rental rates, although pretty high if you are putting a bunch hours on annually" and emphasize that it works well until you start putting lots of annual hours on a machine then you should be able to beat rental numbers with late model or new equipment. I have seen many job and equipment cost reports and have become a firm believer that rarely can you beat dealer rental rates!! they are very good numbers to use for estimating. this does not mean you can't purchase and maintain equipment of your own however. what you must realize is you have to use the equipment full time 160-176/month if your using monthly rates and renting equipment. i spent 11 years as a shop foreman trying to beat rental rates with my maintenance and repair programs and only did it a few times, 1) a 966f wheel loader 2) all 84" drum rollers 3) 14g grader, never with a hydraulic excavators, tracked dozers, tracked crushing equipment, small scrapers, or highway trucks. now that being said rental rates are not your only cost when you rent there WILL BE damage! many times i have put fuel tanks on cat wagons because they are so soft on the front end (rent volvos when you can) rear steps and what not on elevating scrapers from being pushed out of the mud, artic truck fenders that got cracked/bent after getting stuck in the mud, excavator right rear doors, excavator coupler hoses and broken bucket shanks, wheel loader grilles, lights and back up alarms from backing into stock piles in a tight quarry, impact crusher approns from running uncrushable tramp iron through them, i can go on and on. ........................................theironoracle
We rent most of our equipment as we are a new company that does a variety of work. We do a lot of stream channel restoration as well as mine reclamation work. Each has certain equipment demands and we do not have the resources to purchase all that we would use, and probably would not even if we could. One project this fall we had a 330D, 2 730's, and a D6N. The next we had a 320E, a 324 long reach, and 938 loader. An earlier job required a water truck, roller, and 160H. You get the picture. Fortunately we have very conscientious operators, use radio communication on all jobs, and look out for each other (letting the hoe operator know if he is getting the counterweight to close, watching that we don't dump the haul trucks on too much side slope, etc.) Damage has been limited to front glass on the hoes for the most part. It can get very expensive if you start dinging things up. Assuming that you would repair such things on your own equipment you would still have repair expense, but would likely save some on the labor. We do not have maintenance costs on the rental equipment with the exception of greaseing the machines though, and if something goes down our dealership is fantastic about getting someone there immediately to fix it. On one occasion they paid to have a replacement machine brought in the same day as they could not get the repairs done until late the next day. Another advantage in our situation is that the equipment that we rent is very low hour, and dry. Agency folks don't allow any oil leaks when working in stream. Anyway, if I were doing pretty much the same work all the time I would purchase equipment specific to that task, but for us this works better right now. Sorry if I am getting long winded here. If anyone would like me to email them the spreadsheet that I tried to post above I would be happy to send it. It is nothing special but at least the formatting is done. Oxbow
actioninc, that 10 yd highway dump truck with operator in the northwest is about 90/hr wet with operator, 12-13 ton legal load doesn't get 10 yds of anything compacted, just be very careful with that number...........theironoracle
Thanks for the good info guys!
Have a log for each machine here. Every day enter where it is, what it does, fuel, oil, repairs and maint. and the like. At end of year adjust rates based upon actual cost to operate. Been doing this for a long time so have a lot of good historical cost data here
I was hoping to get some new info on this subject, how people keep track of this. I am in the process of trying to keep track of this information. I pretty much had to start from scratch with my company and I am having difficulty keeping track of all expenses. I do multiple jobs at my company, mechanic foreman/operator/computer tech (sometimes)/job site foreman and whatever else needs handled. It is hard for me to always keep track of our cost and it drives me nuts. I have one mechanic that works for me and then some guys do small work on their own equipment and I can't seem to get thru their head what I am trying to do. I have explained what I am doing but I can never get them to keep track of what they are fixing or what they have bought. I have tried to make the process as simple as possible but it hasn't helped. I made my mechanic a folder that has multiple forms to keep track of everything but I can't seem to get him to do it. All he has to do is write down what he fixed and the part number(if he got it out of our inventory) or staple a receipt to it and then the date and mileage and that is it. Sometimes I am gone for a month at a time working out on a jobsite and when I get back he hasn't keep track of anything he has done. Well that’s the problem I have with trying to figure out cost per hour. I would really like to know what our actual cost per hour is on our equipment and how much it increases every year so we can know when to get rid of that piece of equipment based on an increasing cost per hour.
so the program I helped develop and used went like this: 1) each machine has a number 2) when he works on that machine he puts that on his time card (he only get paid for what is correct on the time card) 3) every purchase invoice gets an equipment number on them, you set this up as mandatory with the parts houses. as far as inventory when its purchased it gets any equipment number if more than one machine takes the same part just average or put one machine on one time the other the next time you buy it. it is very true its actually all the 1000 dollar bills that add up but you can't spend hundreds of dollars just trying to track it. so now you have created a paper trail, when you get back from that job you can enter all this info into a cost report program and spit out a number, it really should be done as part of accounts payable then the report is ready anytime you need to look at it. don't forget to add in shop overhead, everything that didn't hit the time card or the invoices from the part suppliers. I came up with once that a man in a shop/or truck costs 3 times his wage, i.e. if you pay him $20hr he actually costs you $60/hr this includes all overhead including your part to pay to the state or feds, his redoes, shop building, service truck, tools, consumables, etc. I came up with this to separate what my head mechanics cost me from what the shop cleaner cost me, I did my damndest to keep a shop cleaner under the foot of my head mechanics so they could get more done, they always had a clean work area, they never made a trip to the solvent tank, they never had to fetch his own parts, his tools were cleaned ready to be put into his box and it didn't take him an hour, etc... so the head mechanic cost me $90 and the helper cost me $36 the total is $126, the average is $63.50 for A+ work...anyways back to you ordeal, what kind of accounting software are you using? ...............theironoracle
First let me say when I say my company, I mean the company I work for. Next we use quick books I believe for accounting but this is not what I use to keep track of equipment. I started out making some programs in excel to keep track of everything but this was slow. Next I started making databases in Access but I am not real knowledgeable at access and couldn't get it to do some stuff I know it can do. Finally I just bought a fleet management software. This was a good purchase, saved me a lot of time creating my own and it pretty much has everything I need. So here is how I presently keep track of everything. Most of it is how you described, every piece of our equipment has a number, everything you buy you need a PO with equipment number. The problem is our PO's are used to keep people from charging stuff on our account that they are not suppose to and I never see most of the PO's. The next problem is we do not do our own tire work, so when we have a flat tire a lot of times I never know about it because the guys will get a PO from secretary and rund to the shop down the street and get it fixed or replaced. The last problem is my other mechanic; I can't get thru his head to fill out paperwork. I made him a nice little binder that has every form in it that he would need to keep track of everything: when something need serviced, what parts/fluids were used for servicing, hours on equipment or miles on equipment, repairs needed, repairs made and everything else. Its only me and him that does the mechanic work and more him than me lately because I have had to operate equipment a lot lately. So when I am gone from the shop for a week or two and get back and he has not filled out any paper work my whole system has pretty much feel apart. He doesn’t understand I need that paperwork to keep track of stuff for our records as well to stay compliant with DOT regs. So it is pretty much a nightmare and I am not sure how to get everyone on board with me. I guess I am really the only one at my company that care about tracking this kind of information, the owner/boss has never really had anyone keep track of it. The only thing he really sees or cares about is our overall net. I really would like to get a solid number on all of our equipment cost per unit, not our overall expense on everything. I think this would help us in many ways: it would help us know exactly what we should be charging for equipment, when we should sell equipment (rather than continuing repairs), what cost we can reduce on equipment and many other things.
I apologize if I am hijacking the original posters thread, I'll start a new one if you want. I just thought it kind of went along with what the original post was about.
I have a real bad attitude when it comes to trying to create policy or implement work practices that the owner is not fully supporting. I tried this for many years at my last job and it became a loosing battle which caused me finally to quit my job and go out on my own. I have written policy had it approved put in the employee hand book as basic law and when the owner or head superintendent decides to they don't need to apply it whenever it suits them. So what i am trying to say here is get the owner behind it first then go from there. another thing i see here is your double doing your work, you don't have a separate program for machine costing this is done in quickbooks, you create an account for each piece of equipment, in it you have sub accounts i.e. tires, oil, parts, fuel, payments, insurance, and when they do payroll they can charge it to that machine also. it is not your job to enter this info it is accounts payables, then you get a report for each unit whenever you need it, divide it by the hours it was billed out, (this part is very important most of the time unless you only get paid time and materials the hour meter is always more than what was actually billed out, why? that is a hole nother thread), this will give you a cost per billed hour...and you are absolutely correct about keeping track of your cost per unit for replacement purposes.. i have to wonder though if there isn't true equipment cost, there probably isn't true job costing, or production reporting, or ??? how in the heck can someone actually estimate and operate a job, that being said how long has this outfit been in business? i can't imagine they made it through the last recession..imho.....TIO
Oh they have been around awhile, not sure exactly how long but I would say over 30 years. I'm not saying they don't keep track of anything, they keep track of how much is spent and all but I don’t think it is accurate enough for what I am talking about. What I mean is we know how much we are spending on equipment overall but I think there is some cost that are missing when talking about each piece of equipment individually. I think the boss has a pretty good idea of what it cost to operate most every piece of equipment from experience and partly from tracking cost, as well as competitor rates. As far as production reporting, I don't know. If you are talking about man hours to complete certain type of jobs, then I guess we don't really keep track of that as far as I know. We do know how long it will take to complete a job though and I would say most of the time we are right on the mark. I mean we have laid enough pipe to know how long a job will take to do a job. If its 10 miles of 12 inch pipe we know how long that will take, or we can figure based on the job scope pretty easily. We don't lose money on jobs. As far as double doing the work, I think it would be harder to keep track each piece of equipment with quickbooks; I'll try to explain why or partly why. First I have to get my parts either shipped in or I drive an hour and a half to get them, so when I buy stuff for servicing it is kind of in bulk and not for each piece of individual equipment. To separate 3000 or 4000 dollars in filters and fluids out would take a long time to do using PO's or whatever. I have some equipment (CAT's and Fords) that all take the same filters and not all of them are serviced at the same intervals (I might service one backhoe 3 times a year and the other 4). So I cannot just say that I will divide all of those filters equally between the two. The way I do it is I have all my parts entered in my computer; all I have to do is change quantity on hand. Then when I service it I create a work order and add that part to it, plus the time it takes for me or my mechanic to do it and there’s my cost for servicing (it’s a pretty quick process as long as I can get my other mechanic to fill out the form I created). It takes me maybe a mintue to fill out a work order. Same goes with other parts but I only get most of them when I need it. Then for stuff like lights, electrical wire, fluids that can go to any piece of equipment there is no way to put a specific piece of equipment on a PO either, that has to be done after it is installed. To me to communicate all that to the secretaries would be very difficult and it seems easier for me to do it and keep track of it. As far as the hour meter goes, I don't think we ever bill out less than the hour meter shows. If it is a bid job, that piece of equipment gets billed to that job for the entire work day and at most it’s going to run the entire work day but probably less. If it is a by the hour job that piece of equipment starts getting billed out as soon as it starts getting loaded on the truck to leave the yard. So the hour meter should never show more than what has been billed out on it. I'm having a hard time wrapping my head around why you would want cost per billed hour and not per machine hour, I think I might see why but would like an explanation? We are not a very big company; I am responsible for 76 pieces of equipment: 29 on highway vehicles, 27 trailers and 20 pieces of equipment. We don't do multi-billion dollar jobs or anything. Most of our jobs are in the couple million dollar range and lower, most of the time lower. We run 6 gang crews a day, all day, pretty much every day (well not every sat and sun). We do have our slow weeks but we still have 3 dedicated gang crews that always will be working. I say this because I don't see how a multi-billion dollar company can keep track of this info thru accounts payable. I would think they would have a completely separate account for their maintenance department and a dedicated secretary to keep track of that specific part of the business and the company would receive an overall cost analysis from them, but I don’t know I am kind of new to all of this. We are not a big enough company to have separate secretaries for different areas. We have two secretaries and they pretty much stay busy putting on all of our job tickets, accounts payable and receivable for everything we have now, much less trying to break everything down to separate equipment. They do break it down where they can and I think we do have separate accounts for each piece of equipment but I think it is overlooking a large part of the cost the way we do it now. I may look into trying to keep track of the cost the way you are saying but I don't think it will be possible to keep the information accurate enough to get a good cost estimate on equipment. Maybe it would be close enough though, I don’t know. We are small and I take care of quite a bit of stuff and hope one day I can help run it, that is a big reason I am trying to get all of this stuff straightened out now. The two owners/my two bosses are a really good guys and very smart but I think they have been able to get by without having to keep track of information like this because they are very good at estimating these cost/figuring them out with the information they already have. I would just like to have this information for my own sake pretty much and to help the company but I don’t think we have to have it. They support me in what I do but I don’t think they are going to completely revamp the company for stuff like this. They are happy with the way it is and I don’t blame them. Sorry for the long post and I hope part of what I said is made sense. One last thing, I love the company I work for and the two owners are the by far the best I have ever worked for.
I agree with the aforementioned (learned that word from Nige) sentiments regarding tracking individual equipment expenses. Perhaps as we begin to acquire more equipment I will need to invest in a fleet management software program. I use Quicbooks as well, and it is unfortunate that hours on a machine cannot be plugged into it to reflect the cost per hour. I end up using a simple excel spreadsheet to track what little we have to keep track of, but it requires double entry of receipts, and I HATE entering receipts.
Oxbow, if you get a fleet management software the one I use is pretty good. I tried 2 or 3 before I decided on TATEMS. I only use the trial periods on the ones I tried and decided on TATEMS because it pretty much tracked everything I wanted without to much extra stuff. It is not perfect by any means but it's pretty good. Their are a couple of things that are annoying and wish they would change but it is a pretty good program and I haven't seen any bugs in it yet and I have been running it for a year and a half. I am in no way affiliated with this product.
Wow, this is a heck of a discussion. I complain a lot about my previous employer but when it comes to equipment and job costing I must say they did a great job! I will establish one definitive rule here "the total cost of equipment must be kept track of by accounts receivable" why? they pay every invoice for the entire company they have to cost it to wherever it goes I don't care if its a new computer for the office or the trip for the owners to con/ag in vegas or the pipe for the job or the hydraulic pump for the excavator it all gets entered by accounts payable into the correct cost account... now as equipment manager it is your job to be sure that every invoice has an equipment number on it that the shop purchased! how did I do this? my vendors which is used the most had a note that popped up on there screen which said PO required at that point I gave them an equipment number, now I did have many invoices which didn't get equipment number for whatever reason, at this point about once a month when accounts payable was reconciling invoices against statements to be paid they would call me and say there is a $326 invoice missing say from the kenworth dealer at this point I would have to think back and maybe talk to the other mechanics or look at work orders or time cards or whatever to decide that it was say an alternator (this process which is time consuming makes you very good at being sure you got equipment numbers on every invoice). Now at this point you get a report from accounts receivable and you decide how many hours machine has run over the year and plug those numbers together and have a cost per hour!!!!! This number however is not anything by itself that sell/purchase decisions can be made!!! the largest cost of owning a machine is its devaluation for many years and if you are still putting considerable hours on a machine the point where the devaluation and the repairs (not operator error broken stuff and not maintenance) are equal is where you replace or retire it.. Lets deal with the tire invoice question were the operator/driver takes care of this work himself first on a licensed vehicle in regards to creating numbers to sell/purchase a replacement vehicle these numbers are not important, why? because these tires will get ruined or go flat if the truck is new or old, regardless of that you want to keep track of this! ok then the accounts receivable does not pay that invoice unless it has an equipment number on it!!! This will come to you at the end of the month and you will have no idea what truck it went to so she tells you it was a flat repair for a 11/24.5 tire you then know it went on a large truck and you cost it to (heavy truck misc) at the end of the year when you get that report and there is $12000 is this account you divide it in proportion from whatever truck cost you the most and whichever cost you the least (I hope I made that clear).. so in regards to filling out a time card so it gets costed correctly, my time would look like this x-y-z (example) x=equipment number y=what you did z=job location, x equipment is self explanatory , y could be repair, parts ordering, driving, labor, fabricating, operating, estimating, we split sewer pipe from water pipe, sub grade from finish grade on and on, the more numbers you have the better you can estimate the next job these numbers were consistent through the entire company everyone used them, obviously a mechanic would use repair mostly but parts ordering sometimes and driving a lot also, job location was important because we all had base wages which were paid in the shop while driving and all private work, on government jobs you were paid according to "davis bacon" or certified payroll rate this changed all the time depending on which job it was and yes your payroll department has to take care of all of this.....I got to go ask more question I will try to answer...........TIO
Thanks briscoetab, I'll look into it. On a similar note, has anyone tried the product advertised on TV called NeatDesk, or Deskneat? It scans reciepts and then allows one to organize them on the computer, I think.
I understand all of what you are saying theironoracle but I still do not see how they are suppose to keep track of all the parts and fluids I keep in stock. We pretty much do track our expense the way you are saying and many times the secretaries come and ask me about PO's and what they go to. We also have the messages that pop up on vendor computers about having to have a PO. The tire stuff as an example, those guys have to have a PO to get a tire with equipment number and the secretary knows about it but I don't. I guess the problem is they have all the info but not all of it is completely broken down to individual equipment, I don't have all the info but it is broken down to all the individual equipment. I cannot put equipment numbers with this stuff at time of purchase because a lot of it I have no idea what it is going to be used on. I probably have 10,000 dollars worth of stock that I keep on hand (this is a complete estimate maybe much higher or lower but I expect it is close to 10,000). Now some of the filters I do know exactly where they are going but then I have air hose, lights, mud flaps, batteries, hydraulic fluid, air compressor fluid, engine oil, gear oil, anti freeze, weather seal, backhoe teeth, air line fitting and so on, I think you get the point. Now I feel like if these items are just completely ignored or divided evenly to all equipment I would not be getting a good estimate of my cost. Maybe what I need to do is set down with the boss and secretaries and see just what we have. We do track our job cost and equipment expense but like I was saying earlier on the equipment expense much of it is not divided down to individual equipment. Maybe they have it pretty close to the way you are talking about tracking it and I just didn’t know it. I may possibly be the reason we are not able to track the equipment cost but I just don’t know how I can order all the stuff I need and assign it all to each individual piece of equipment. We may be tracking equipment cost per hour and I just don’t know it but if we are the number is not correct. Sorry to keep beating a dead horse, I am just trying to understand the proper procedures to keep track of these items. I do appreciate all the advice that everyone has already given and understand if you are through with this thread. Maybe I am just slow and you have addressed the issues I am asking about and I just don't get it. Thank you.
briscoetab, I completely understand your frustration regarding oil, filters etc. that you stock but have not applied them to a particular machine. It is almost as if you need to "re-sell" from your stock inventory to a particular machine when it is used, but that would really make things complicated. Just dividing the stocked items uniformly over all the equipment in the fleet does not reflect the operating cost of each machine very well. I'm grateful for the lengthy explanations that everyone has posted, and I guess if it were simple then we would not have much to talk about on this thread.
Yea that is kind of what I was thinking Oxbow, that you would have to resell to yourself and like you said this would get very complicated. That is why to me it seems easier to track all expense at my level for individual equipment cost and then track overall equipment cost in the accounts payable. Obviously though it isn't very easy because that is what I am trying to do now and I am on here asking questions. All of our equipment costs go to accounts payable but for stuff that hasn't been assigned a piece of equipment I just write shop/equipment on PO's. So accounts payable know it's an equipment cost, just not which piece of equipment. I have all my stuff set up to where I can track all of this; I'm just losing stuff in the paper trail or laziness of employee's.
I've been reading this with great interest. When I started in the business the companies I have experience with just lumped all the equipment costs into one account and managed the company from there. The costs were broken down by major item, fuel, repair parts, maintenance items, tires, ground engaging, capital cost, insurance and so on. The engineering staff, if there was one, just crammed these figures against income and tried to decide whether or not the company was making the money they wanted to make. Sometimes I saw short cuts like cost per ton against number of employees or fuel cost per ton of production and other such nonsense. It is actually funny that the costing issues seem to be addressed more from the mechanic staff fixing the iron than the engineering staff. When I was running a shop or two is that payroll and costing are two completely separate functions and when I was trying to reconcile cost per hour on individual machines the clerical staff in the main office and in my office just couldn't comprehend each other. What I wanted to accomplish was operators and mechanics filling out time sheets with items like fluids added, down time reasons, hour meter readings, parts and so on. I'm pretty sure that even today Quickbooks separates payroll and payables. I did set up job costing even in my own business but still had to manually input that information. Consequently I usually had six or eight hours a month of just inputting that info. At any rate I feel your pain. The only businesses that seemed to track labor directly were equipment dealerships because they were paid on the labor hours and parts purchased. I always thought that system should be directly applicable to any company. Last time I looked I think there was a not too hard way to set up a stock account in Quickbooks from which supplies can be doled out from. As I recall it even makes pilferage a pretty easy item to track item.
i cant help but was wondering about this in my area a bobcat or mini ex runs around $75 per hr for asample if go out to a small residental job and do 8 hrs of grading @75 per hr which is 600 by the time you buy fuel for truck to haul equipment fuel for tractor and if you pay an operator theres maybe 350 or so left how do these guys make money on this type of prices after maintence and insurances if there not doing this every single day
reason i said this i bid small jobs and this is what gcs tell me they pay. i just dont see any reason to work this cheap or am i wrong for thinking that
Dozierman, I started out in that environment and I remember thinking the same thing, why so cheap!? What I found out is the companies that are established keep the little hourly stuff around like digging basements, fine grading, etc. for the cash flow. They usually have bigger contract jobs going that make the money. It is handy for them to have the little stuff around to keep some money flowing while waiting for the big monthly checks. That being said, if all they do is small hourly stuff, then my goodness they better be doing it 6 days a week 10 hours a day.... This has turned into a great thread with lots of info you cant buy, thanks to all the above for the insight! I am at that point where you have a feeling when a piece of equipment needs to be replaced, etc. But it sure would be nice to have some actual numbers to back that decision.... Thanks again
if all they do is small hourly stuff, then my goodness they better be doing it 6 days a week 10 hours a day.... thats the problem im having in the residential market thats all these guy do is the small hourly stuff ,i have been trying to back away but cant seem to find a way in to the commercial market im thankful for the gcs that i have that keep me busy but its just not enough
Hey Oxbow, I know this is a long shot because this post is from 2 years ago but I was wondering if you could send me that spreadsheet file about rental rates? I've been trying to make a spreadsheet exactly like yours for a month now! We own our own construction equipment rental/sales/service and I am looking to tighten up the boots on a lot of things that have slipped since the economic downturn. Thanks in advance =) Steph
I would like to receive the spreadsheet please [email protected]
Spreadsheet sent.
Oxbow, could you please send 1 more to: [email protected] I spend a good part of my winter trying to figure out costs, production rates and estimating data. Thanks so much!
Oxbow, I would really appreciate it if you could send a spreadsheet to me also at [email protected] . That really looks like a great way to track those expenses. Thanks again.
Can you PM it? I'd love one as well please
Spreadsheet sent. Remember to plug your own numbers in. Our rental rates may be higher due to our relatively short construction season, and some of the rental rates are based on weekly as opposed to monthly. Oops, I forgot to attach it. I'll try again.
I don't seem to be able to attach a file in PM movindirt. I did send you a message, perhaps you can send me your email.
Oxbow, anyway you'd be willing to email me that spreadsheet you use? I'd love to experiment with it?
Oxbow I would like a copy also thank you
If you will send me a PM with your respective emails I will be happy to send it to you.
Oxbow I would also like a copy of your spreadsheet that you use. Thanks. [email protected]
Sent.