Fixed Price Billing Explained

Fixed Price Billing Explained

At Bozeman Site Services we offer a full range of pricing options to cover all of your property servicing needs.  We present the following options:

These two are presented in other blog posts that explain them in depth (click either one to research this item):

There is also another pricing option that has unique benefits for our customers. It is called:

      • Fixed Price Billing – read on!

The unique feature of Fixed Price billing is that it bundles the majority of your regular maintenance services together into a monthly fixed rate.  This helps avoid the highs and lows that a property owner can experience in their monthly bills that occur with other pricing methods.  This pricing method is often called and is similar to “budget billing.”  For example, it is similar to the pricing method that is used by utility companies that spreads out the high cost of heating in the winter into a year round rate so that each customer can better budget and plan for their monthly expenses.

Fixed Service Pricing

Let’s look at a real life scenario.

Let’s say the Fixed rate was established and agreed upon for $350 per month for a winter services proposal. For the sake of this example, let’s say that a typical driveway plow costs $50/plow.  In 2021 we had a mild January that had approximately 5 snow events. That would be a cost of $250 for January services (5 X $50 = $250), but the fixed rate would be charged and you would be billed for the agreed rate of $350.  You might be tempted here to think, “Ouch, I would be overpaying” – buy read on!  In February we had 18 snow events! That would be a cost of $900 for February (18 X $50 = $900), but you would again be billed for the agreed rate of $350.  In this scenario you can see that you would have paid an “extra” $100 for January. You can also see that in February you would have had a savings of $550.

Over the course of a year, what appears as ‘over charges’ and ‘under charges’ will generally level out – this the “Budget Billing” benefit.  As an HOA, COA, Property Management Company or Homeowner you avoid the highs and lows that unpredictable weather can produce and are able to set a monthly cost that will help make budgeting much easier.

We can see this on a seasonal basis as well.  If you are an annual customer (your services span throughout the calendar year – Summer and Winter) the services provided my be much more expensive in the Summer than your Winter services.  The higher Summer costs would be spread out throughout the calendar year to keep your yearly rates lower and steady, no peaks and valleys.  This is also true if your Winter Services outweigh your Summer Services.

“If you want a more consistent property services bill each month, Fixed Price billing may be right for you. “

Lastly, Fixed Price services may also be packaged with Per Service services or T&M services.  This will put some flexibility into the per month total charges but can help reduce the volatility and size of the potential highs and weather dependent charges. 

Here’s a quick example:  BSS will be providing year round care for your property entailing: Turf Maintenance, Turf Fertilization and Weed Control, Irrigation Services, Snow Plow and Snow Shovel Services – all for a rate of $300/month.  But you also have Beds that need maintained. The Beds service is a service we provide as a T&M service.  In May we carried out all of our responsibilities under the Fixed rate and we also provide a Bed maintenance service that included the following, 1 hr labor @ $75 hr, and weed spray of 1 gal @ $5/gal.  Your cost for May would be the Fixed Rate of $300 + the T&M of $80 for a total of $380 for May.

If you choose to cancel your services under a fixed contract there are things to consider.  At the termination of a ‘Fixed Price’ proposal, BSS will do a thorough determination of the actual expenses incurred up to the end date and will bill you appropriately. This could mean that your last bill may increase to cover prior services provided that were spread out over the term of your contract.

Fixed Price, plus some consideration for the additional services (per and T&M) is a great way to ensure that you are able to budget each month and be ready for the monthly expenses that your property upkeep requires.  We provide this form of pricing to attempt to help our customers meet their property challenges in a fiscally manageable way. We want to minimize the “Surprises” that weather and property realities may throw your way.

Make sure to look at our FULL SERVICE LIST to see what services are potentially available to our customers with Fixed Service billing.