Take your last fifty invoices and write every line into one simple sheet: what the work was, the quantity, what you charged, roughly how long it took, and what the materials cost you. Group the lines into the ten to twenty kinds of job you do most. For each group, work out what you usually charge and what that job actually earned you per hour once materials are taken out. Then set each item on your price list from your real time and costs plus your margin, checked against prices customers have already accepted. You end up with a list built from evidence instead of memory, and nearly everyone who does this finds two or three jobs they have been undercharging for years.
Why invoices beat memory
Ask a tradie what they charge for a common job and the answer comes instantly. Ask how long that job really takes, including the drive, the prep and the clean-up, and the answer is a guess. Prices set from memory drift: some creep up with confidence, others stay where they were five years ago because nobody ever questioned them. Your invoices record what customers actually agreed to pay, and your diary and receipts record what it cost you. Put the two side by side and the drift shows.
Step one: gather the paperwork
Pull fifty invoices, or three months of them if you invoice less often. Fifty is enough to show patterns without becoming a project. Find the supplier receipts that go with them, so you know what the materials cost rather than what you remember. For hours, use whatever you have: your diary, timesheets, the time stamps on photos, your phone's location history. Estimates to the nearest quarter hour are fine.
Step two: one row per line
A spreadsheet or a notebook, one row for each line on each invoice. The columns: date, kind of job, quantity, unit, amount charged, hours, materials cost. An invoice with five lines becomes five rows. It takes an evening and it is the dull part. Everything after it is quick.
Step three: group the work
Sort the rows into groups of work that is priced the same way: interior walls per square metre, doors each, a call-out, a hot water replacement, a metre of fence. Ten to twenty groups covers most trades. Anything that happened only once stays out of the price list; it is a typed-in line when it comes up again.
Name each group the way a customer would read it on a quote. "Doors and frames, two coats" is a good item name. "Doors" is not, because the customer cannot tell what is included. The glossary entry on the line item has more on naming.
Step four: find what each job earned
For each group, work out three numbers: the usual price you charged per unit, the average hours per unit, and the average materials cost per unit. Then the one that matters: effective hourly earnings, which is price less materials, divided by hours. Compare it with the hourly rate you need to cover your costs and your margin. The groups well below it are where your money has been leaking.
A worked example
Wren Gully Painting is a fictional two-person painting business with a target rate of $88 an hour. Its last fifty invoices cover four months and hold 212 lines, which sort into 14 groups. Three of them tell the story.
Interior walls, two coats. Usually charged at $20 a square metre. The work averages 0.18 hours a square metre and $3.10 of paint. Effective earnings are $20 less $3.10, divided by 0.18, which is $93.89 an hour. That is above target, so the price stays.
Doors and frames. Usually charged at $110 a door. With sanding, filling and two coats on both sides, each door averages 1.6 hours and $9 of paint. Effective earnings are $101 divided by 1.6, which is $63.13 an hour, about $25 an hour under target on every door. A price built from the real time is 1.6 hours at $88, $140.80, plus paint at cost plus 25 per cent, $11.25, so $152.05. The new item is $150 a door.
Feature walls with a colour change. These had been charged as ordinary walls at $20 a square metre, but a strong colour over a pale one needs a third coat, and the work averages 0.27 hours and $4.60 of paint a square metre. Effective earnings: $15.40 divided by 0.27, which is $57.04 an hour. A new item, feature wall with three coats at $30 a square metre, earns $94.07 an hour on the same figures.
The doors are the big one. The four months held 96 doors, which is about 288 a year. At the old price that is $31,680. Even if a fifth of that door work were lost to the higher price, the remaining 230 doors at $150 would bring in $34,500, with about 93 fewer hours on the brush.
Step five: load it and keep it current
Put each group on your price list with its name, its price and its unit. Quote Desk has no import, so items go in one at a time through the form, which for twenty items is a short evening; the price list page shows the three fields. Whatever you use, keep the list short enough to scroll on a phone.
Repeat the exercise every six months with the next fifty invoices. The second time is much faster, because the groups already exist and you only need the new numbers. The guide on hourly rate or fixed price covers recording quoted hours against actual hours, which makes the next round more accurate.
Mistakes to avoid
- Using quotes instead of invoices. A quote is what you asked for; the invoice is what you were paid.
- Leaving out travel and prep time, which makes every job look more profitable than it was.
- Averaging prices across jobs that are not alike, such as doors with and without a colour change.
- Building a list of a hundred items. If you use an item twice a year, type it in when you need it.
- Raising every price at once by the same percentage. Fix the groups that are under target and leave the rest.
What to do this week
- Pull your last fifty invoices and the supplier receipts that match them.
- Spend one evening putting every line into one sheet.
- Group the rows and work out effective hourly earnings for each group.
- Re-price the two groups furthest below your target rate.
- Put a reminder in your diary to repeat the exercise in six months.