Are 4 Fitters Really 640 Hours a Month? — The Cell That Makes Every Job Look Better Than It Is

This article covers management-accounting principles for decision support. It is not accounting or tax advice for your specific circumstances. Always use your own figures.

One cell, and everything downstream of it

Every job-costing file in the world has a cell along the lines of "billable hours per month" — and most people put the wrong number in it the moment they open the file.

The most reasonable-looking approach is:

4 fitters × 160 hours per month = 640 hours

That number is not wrong because the arithmetic is wrong. 4 × 160 = 640 is entirely correct. It is wrong because the thing it asserts is impossible.

640 hours claims that for every minute you pay wages, a customer pays it back. No travel to site, no waiting for materials, no morning meeting, no tool prep, no snagging, no rework after a complaint, no sick leave, and not one day in the month without booked work.

Put differently — 640 is the figure for a business that does not exist.

What the real number looks like

What belongs in the cell is hours actually sold = total hours × utilisation.

At 65%, a rate commonly seen in contracting and installation work:

4 people × 160 hrs × 65% = 416 hours

65% does not mean your fitters idle away a third of the day. It means 35% of the time you pay wages for has no customer work order behind it — which is normal for every business that sells work as jobs.

That time goes into:

• Travel to and from site — an up-country job easily consumes half a day
• Waiting for materials, for a crane, for power, for site access
• Morning briefings, handovers, close-out
• Tool prep, loading the truck, cleaning and putting away
• Rework on jobs already done, which cannot be invoiced again
• Days with nothing booked

What the difference costs in money

Same shop as the article on break-even and the cash floor — fixed costs of ฿420,000 a month.

A gap of 53.8% — multiplied into every job you quote.

On a single 24-hour job:

And across the month — if you price using 640 but only sell 416 hours:

Overhead recovered = 416 × ฿656.25 = ฿273,000 Fixed costs actually payable = ฿420,000 Short by ฿147,000, every month

฿147,000 a month is ฿1.76 million a year that no job is carrying — while every job in the file reads "on target margin".

This is why so many businesses never run out of work, the fitters cannot keep up, turnover rises every year, and the bank balance never moves.

Measuring it without buying anything

No investment required. Record two numbers a week:

1. Hours booked to customer work orders, everyone combined (from the work orders you already issue)
2. Hours the business paid wages for, everyone combined (8 hrs × working days each)

Utilisation = number 1 ÷ number 2

Three months gives an average you can trust — and it beats buying a time-tracking system that nobody fills in, comfortably.

Until you have data, start at 60–70%, because starting conservatively keeps prices from being set too low, which is the far more expensive mistake: a slightly high price you can concede during negotiation, but a price that was too low all year you discover when the accounts close.

🔴 Traps that come with this number

1. Do not adjust it month to month. The price you quote should not swing with how quiet the week is. If a busy month tempts you to raise it to 500 hours, prices drop exactly when your bargaining position is strongest — the opposite of reality. Set an annual average and handle idle capacity through job-level decisions instead.

2. Overtime is not base hours. If a month runs on overtime, do not add it here. Overtime has its own genuinely-extra cost, and belongs in the extra-labour line of the job that caused it.

3. If the resulting number prices you out of every job, do not massage it. It means the business is carrying more fixed cost than the work it wins can support — which is what the number is telling you. The remedy is more work or less fixed cost, not a different cell value. Editing the cell only moves the loss to the end of the year.

What to do

1. Never enter headcount × calendar hours — that is 100% utilisation, which does not exist
2. If you have never measured, start at 60–70% and correct from what you record
3. Measure with two numbers a week — hours on work orders ÷ hours paid
4. Set it as an annual average, not monthly, so prices do not swing out of step
5. If the number prices you out of everything, that is the answer, not a fault in the formula

The tool for doing this today

Job Costing & Pricing Calculator keeps this cell in front of you instead of set once and forgotten:

• The settings sheet puts the two cells that matter most in the whole file side by side — monthly fixed costs and hours actually sold — because the system uses those two to spread fixed cost across every job
• Status lights fire when an entry is out of range or contradicts another — 640 against that headcount trips a warning
• A banner frozen to the top of the pricing sheet shows how much of this month's fixed cost no job has picked up, and projects the shortfall from your actual pace — the ฿147,000 in this article will not wait until the accounts close
• Every setting keeps a "factory value" to copy back from when you break something
• A self-test sheet of 24 cases you can run yourself before trusting it on live work
• No macros — Excel, LibreOffice and Google Sheets all open it

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ℹ️ The workbook itself is in Thai — sheet names, labels and the in-file manual. The formulas and the logic are language-independent, and the product page shows renders of the real file so you can see exactly what you receive.

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