Property Preservation Contractor Discounts
Before contractors can start receiving work orders, the contractor and the company must reach an agreement on “a discount.”
What is a discount? A discount is the percentage of the total invoicing submitted by the contractor that the company will retain as their share of the payment.
The lowest discount appears to be around 20% and it goes up from there. Be sure you understand that you will always invoice your total charges but the company will keep their portion and you will receive the remainder.
As an example, let’s say you and the company have agreed on a 20% discount.
You invoice a job for $1000. The company will send you $800 and they will keep $200.
Let’s say you and the company agree on a 25% discount and you invoice a grass cut for $65. You will receive $47.50 because that is $65 less $16.50 which is the company’s share.
Contractors need to recognize and understand the impact of the discount. Much more is involved than first meets the eye.
For instance, let’s say you perform an initial secure and you used two locks that cost you $5.00 apiece and you used 5 gallons of antifreeze that cost you a total of $30. When you give a discount to your services, your supplies cost increases by that percentage. If you are giving a 20% discount, the two locks really cost you $12.00 – $6.00 apiece because of the discount and the $30 of antifreeze really cost you $33.00.
Discounts from 10% to 50% and more are common. Figure things out before you sign the contract.