Understanding Pricing Methods

Concept Guide – Learn the difference between how you structure a Quote and how you charge it.

Two Separate Decisions

When building a Quote in JGID, there are two independent decisions to make.

How do I want to structure this Quote?
How do I want to charge for this work?

Many estimating systems combine these into a single concept.

JGID deliberately keeps them separate, giving you much greater flexibility to present your Quotes the way you want while choosing the pricing method that best suits the project.

Quote Structure

A Quote can be structured in three different ways.

Each has its own purpose.

Single Line Item

The simplest option.

A Single Line Item contains one description and one price.

It's ideal for straightforward work where no further breakdown is required.

For example:

Window Cleaning
Site Inspection
Equipment Hire

Simple, clean and easy to understand.

Composed Item

A Composed Item contains a complete internal breakdown of the work.

It may include:

Services
Materials
Equipment
Travel
Consumables
Other Composed Items

However, that breakdown is hidden from the customer.

The customer sees a single professional line item, while your estimator retains all of the calculations and estimating logic behind the scenes.

This allows you to preserve your estimating knowledge without overwhelming the customer with unnecessary detail.

For a complete explanation, see Understanding Composed Items.

Sub-Item Group

A Sub-Item Group is similar to a Composed Item, except the breakdown is visible to the customer.

For example, they may see:

Labour
Materials
Equipment
Travel

followed by a subtotal for that section.

Sub-Item Groups are useful when you want to clearly show how the total price has been built while still keeping related items organised together.

Pricing Methods

Once you've decided how to structure your Quote, you then choose how each item will be charged.

Every Quote Structure can use either of the following Pricing Methods:

Do & Charge
Lump Sum

The Pricing Method determines how the Job is billed once work begins.

Do & Charge

A Do & Charge item bills the customer for the actual work completed.

For example:

You quote:

1 Hour @ $100

During the Job, your team records:

3 Hours

Because the item is Do & Charge, the Invoice automatically updates to:

3 Hours @ $100 = $300

The Worksheet records the actual work completed.

The Invoice reflects those actual quantities.

This pricing method is commonly used for:

Schedule of Rates contracts
Time & Materials work
Maintenance work
Call-outs
Variable scope projects

Lump Sum

A Lump Sum item works differently.

The customer agrees to a fixed selling price before the work begins.

For example:

You quote:

1 Hour @ $100

Your team actually performs:

3 Hours

The Invoice remains:

$100

Although the additional hours are still recorded on the Worksheet, the customer continues to pay the agreed Lump Sum price.

This pricing method is commonly used for:

Fixed-price quotations
Contract works
Agreed scopes of work
Projects with a predetermined selling price

Why Record Actual Hours If the Price Doesn't Change?

Even on Lump Sum projects, recording the actual labour, equipment and materials remains extremely valuable.

It allows you to answer important business questions such as:

Did we make a profit?
Did we underestimate the labour?
Should we price similar work differently next time?
Which types of work consistently take longer than expected?

Every completed Job becomes valuable estimating knowledge for future Quotes.

Understanding Progress Indicators

As work progresses, JGID compares your estimated quantities with the quantities actually recorded on Worksheets.

If actual quantities exceed the estimate, JGID highlights this so you can review the Job.

What this means depends on the Pricing Method.

For Do & Charge items, exceeding the estimate usually means the additional work will also be invoiced.

For Lump Sum items, exceeding the estimate means your costs have increased while your selling price remains fixed.

This provides an early warning that your profit margin may be reducing.

Choosing the Right Pricing Method

Neither Pricing Method is better than the other.

They simply suit different commercial arrangements.

Choose Do & Charge when:

the customer pays for actual quantities
the scope may change
work is difficult to estimate accurately
contracts are based on Schedule of Rates or Time & Materials

Choose Lump Sum when:

the customer has accepted a fixed quotation
the scope has been agreed
you are providing a fixed-price service
you are accepting the quantity risk

Summary

When building a Quote, think about two separate decisions.

Quote Structure determines how the work is presented.

Single Line Item
Composed Item
Sub-Item Group

Pricing Method determines how the work is charged.

Do & Charge
Lump Sum

Understanding the difference between these two concepts makes it much easier to understand how Quotes, Jobs, Worksheets and Invoices work together throughout JGID.

Worksheets always record reality. Pricing Methods determine how that reality is billed.