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How do I price my jobs as an electrical contractor?

Pricing electrical work profitably starts with knowing your actual costs. Most electrical contractors who struggle with pricing aren’t bad at estimating. They just don’t have accurate data on what their jobs actually cost.

Start with your labor rate. Not your electrician’s hourly wage, but your fully burdened rate. Take what you pay per hour and add employer payroll taxes, workers’ comp, health insurance, paid time off, and any other benefits. An electrician making $30/hour might actually cost you $42-48/hour when you factor in the burden. If you’re pricing jobs at $30/hour for labor, you’re losing money before you even buy materials.

Materials need markup. Ordering, picking up, staging, and managing materials takes time and creates risk. Most electrical contractors mark up materials 15-25% depending on the job. Some mark up higher on specialty items they have to source. If you’re passing materials through at cost, you’re working for free on that part of the job.

Overhead has to be recovered somewhere. Your truck, tools, insurance, licensing, shop rent, phone, software, and office time all cost money. Add up your annual overhead and divide by your expected billable hours. If overhead is $60,000 per year and you bill 1,500 hours, that’s $40 per hour you need to recover just to break even on overhead. This number shocks most contractors because they’ve never calculated it.

After covering costs, add your profit margin. Profit isn’t what’s left over. It’s what you intentionally build into every job. Most electrical contractors target 10-20% net profit depending on job size and complexity. Without a deliberate profit margin, you end up working constantly and wondering why there’s nothing left at year end.

Check your price against the market. If your cost-based price is way above market rates, you have a cost problem, not a pricing problem. Either your overhead is too high, your labor efficiency needs work, or you’re going after the wrong type of jobs. If your price is below market, you have room to increase margins.

The contractors who price most accurately are the ones tracking actual costs against estimates on every job. When you know that you consistently underestimate rough-in labor by 15%, you can adjust future bids. When you can see which job types make money and which don’t, you bid accordingly. This is where job costing pays for itself. A contractor bookkeeper in American Fork who understands electrical work can set up your books so you see real profitability by job, not just a bank balance.

The pricing formula is simple. The hard part is having accurate inputs to put into it.

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More Questions

How do I scale my construction company finances?

Scaling construction finances means building systems that handle more projects without losing visibility into profitability. Job costing, cash flow management, and proper accounting infrastructure have to be in place before growth or you're just multiplying problems.

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What QuickBooks reports should a contractor review?

The Profit & Loss by Job report matters most because it shows which projects made money and which lost it. Also review A/R Aging, A/P Aging, Estimate vs. Actuals, and Unbilled Costs by Job regularly.

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How do I handle bookkeeping for a handyman business?

Keep business and personal finances separate, track all income including cash, log mileage religiously, and categorize expenses properly. Simple systems work as long as you use them consistently.

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What happens if my books are a mess?

Messy books lead to tax problems, missed deductions, and flying blind on cash flow. The good news is it's fixable through catch-up bookkeeping. The sooner you address it, the easier and cheaper the cleanup.

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How do I track jobs in QuickBooks Online?

QuickBooks Online uses the Projects feature to track jobs. Enable it in settings, create a project for each job, then tag every invoice and expense to the right project. The profitability report shows income minus costs for each job.

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How do I track subcontractor costs by project?

Enter every sub invoice with the correct job assigned the same day it arrives. Track committed costs from contracts, not just payments, so you see your true position before invoices land.

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Utah bookkeeping firm for contractors, trades, and small businesses. We provide bookkeeping, construction job costing, payroll, and QuickBooks support. Locally owned in American Fork, serving Provo to Salt Lake City and the entire Wasatch Front.

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