Your posted rate is not what you earn. It is what you hope to earn if every paid hour turns into billable work, every billable hour gets invoiced, and every invoice gets collected.
That is not how service work usually goes. Windshield time, callbacks, discounts, missed change orders, and slow pay all take a bite before the money reaches the bank.
Why your posted rate is fiction
A $175 rate sounds strong until you ask how many paid hours made it onto an invoice. If the crew is paid for forty hours but only thirty are captured, the rate already got cut before the invoice was written.
Then realization and collection take their turns. You might invoice less than the posted-rate value because scope got given away, then collect less than the invoice because payment came late or short.
Utilization: the windshield tax
Utilization is the share of paid field hours that become billable hours. Drive time, shop time, bad scheduling, callbacks, and waiting on parts all push it down.
Low utilization does not mean the crew is lazy. It usually means the system is leaking: routing is loose, jobs are stacked wrong, or nobody is measuring the dead time between paid work and billable work.
Realization & collection: the slow bleed
Realization is whether you invoiced what the billable work was worth. Collection is whether the customer actually paid what you invoiced. They are separate leaks, and they need separate fixes.
Under-billing points to missed scope, weak change orders, or discounting. Low collection points to deposits, payment terms, follow-up, and how fast you ask for the money.
The fix isn't always 'raise your rate'
Sometimes the posted rate is wrong. But a lot of contractors raise the rate and keep the same leak, so the business still feels tight.
Find the biggest drop first. If utilization is the leak, tighten scheduling. If realization is the leak, bill the work you do. If collection is the leak, fix deposits and follow-up before another invoice sits unpaid.
Illustrative example: $175 posted rate becomes $114/hr after the three leaks.
Real shop rate calculator
Enter a real week or month. The result shows what your posted rate actually earned per paid field hour.
The hours you can actually put on an invoice — drive time and callbacks don't count.
Enter a period to find the biggest leak.
Draft targets: utilization ≥65%, realization ≥90%, collection ≥95%, real/posted ≥65%.
Go deeper (the best of the web)
Hand-picked. If something better is out there, we'd rather send you to it than pretend it doesn't exist.
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Float
A clear explanation of utilization and why paid capacity is different from productive, billable work.
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Productive
A practical look at billable utilization and how it changes the economics of service work.
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FreshBooks
A simple primer on billable hours, non-billable time, and why time capture matters for service businesses.