Revenue Leakage Audit: Where Your Plumbing Profits Drip Away

Your tech just finished a two-hour water heater install. Job went smooth. Customer paid. Truck rolled to the next call. Nobody noticed the $47 in fittings that never made it to the invoice. The extra 20 minutes troubleshooting an old shutoff valve? Gone. The trip charge you forgot because the customer was so nice? Vanished.

This happens every day in plumbing shops across the country. Not because anyone is being careless. Because the chaos of running jobs makes it nearly impossible to track every dollar.

The Real Cost of Revenue Leakage

Let's do some uncomfortable math.

Say you run 5 service calls a day. That's roughly 260 working days per year, or about 1,300 jobs. If your techs forget to bill just one $15 fitting per job, that's $19,500 walking out the door. One fitting.

Now add the trip charges you waive because the customer seemed tight on money. The diagnostic fees you skip because the repair was straightforward. The overtime you absorbed because getting the invoice approved felt like too much hassle at 6 PM.

Revenue leakage varies widely by company, but some plumbing shops report losing 8-12% or more of revenue to unbilled materials and services. For a shop doing $500,000 annually, that could represent $40,000-60,000 in lost revenue.

With construction input costs continuing to rise and competition for skilled labor intensifying, you can't afford to give away margin on top of that.

Why This Happens

The leaks aren't happening because your team doesn't care. They're happening because of how plumbing work actually flows.

For many shops, the van becomes an unmanaged mini-warehouse. Fittings, couplings, tape, flux, solder. Your techs grab what they need and focus on fixing the problem. Writing down every item used? That's not realistic when you're lying under a sink with water dripping on your face.

Time tracking breaks down on complex jobs. A tech estimates 90 minutes. The job takes 2.5 hours because the access was tighter than expected, or the old parts were corroded, or the customer kept asking questions. Nobody goes back to adjust the invoice.

Trip charges feel awkward to enforce. When a customer is nice, or the job is small, or you want the review, it's tempting to skip it. If you're waiving a $50 trip charge 20 times a month, that's $1,000 you've donated to customer goodwill that won't pay your bills.

Pricing lives in people's heads. Different techs quote different prices for the same work. The senior guy charges more because he knows what things cost. The newer tech undercuts because he's not confident. Neither approach is tracked or corrected.

The Manual Fix: Your Weekly Revenue Audit

Before you think about software or systems, start with a 15-minute weekly habit that can catch most common revenue leaks.

Step 1: Pull Last Week's Invoices

Every Friday afternoon (or Monday morning if you need the weekend), pull 5-10 random invoices from the previous week. Not the ones you already reviewed. Random ones.

Step 2: Cross-Check Materials

For each invoice, ask:

"Based on what the tech described in the job notes, does the materials list make sense?"

A water heater swap with no flex lines billed? Often a red flag. Verify whether the job was hard-piped, reused existing connectors, or if connectors were bundled into a flat-rate price. A faucet replacement with no supply lines? Worth double-checking. A drain clearing with zero materials? Sometimes legit, sometimes not.

Create a simple checklist for your most common jobs (adjust based on code requirements and site conditions):

Water Heater Install: Flex connectors, T&P valve, expansion tank (where required), gas flex (if gas), venting materials, shutoff valves, Teflon tape

Faucet Replacement: Supply lines, escutcheon, plumber's putty, drain components if replacing

Toilet Install: Wax ring, closet bolts, supply line, shutoff valve

Water Line Repair: Couplings, pipe, fittings, clips, shut-off valve

Step 3: Verify Time Matches Scope

Look at the time billed versus the job description. Use this rough guide:

Simple service call (clear a drain, replace a fill valve): 45-90 minutes including travel

Moderate repair (faucet swap, garbage disposal, minor leak): 1-2 hours

Complex job (water heater, repipe section, sewer camera): 2-4 hours

If the time seems short for what was done, your tech probably underreported. That's money left on the table.

Step 4: Check Billable Items

For every invoice, verify these line items exist where applicable:

Trip charge / Service call fee: Should appear on every billable service call unless waived per your written policy (membership plans, warranty work, call-backs, etc.). If you're waiving it, document the reason.

Diagnostic fee: Applied when troubleshooting took real time. Note that fee structures vary. Some shops roll diagnosis into flat-rate pricing or credit it toward repairs.

Permit fees: If a permit was pulled, it should be billed. Check your local rules. Some jurisdictions require pass-through at cost, while others allow markup. Consider billing permit fees at cost plus a separate admin/processing line item where permitted. The PHCC has resources on business best practices that can help you structure these policies.

After-hours / Weekend premium: If the job happened outside normal hours, confirm your after-hours rate was applied per your pricebook.

Step 5: Track Patterns

After four weeks of audits, you'll see patterns. Maybe one tech consistently under-bills materials. Maybe trip charges get skipped on small jobs. Maybe after-hours premiums never appear.

These patterns tell you where to focus training and accountability.

Making It Stick: The Billing Checklist

Give your techs a laminated card for the dashboard. Before they leave any job, they run through it:

Before You Roll:

• Did I list every fitting, valve, and connector I used?
• Did I account for all my time, including troubleshooting?
• Did the trip charge get added (or documented if waived)?
• Is there a diagnostic fee if I spent time figuring out the problem?
• After hours? Premium added per the pricebook?
• Did I use any materials from my personal stock that need reimbursement?

This takes 60 seconds. It saves thousands per year.

Pricing Consistency Matters Too

Revenue leakage isn't just about forgetting to bill. It's also about billing the wrong amount.

If Tech A charges $350 for a garbage disposal install and Tech B charges $225 for the same work, you have a problem. Either you're overcharging some customers or undercharging others. Both hurt you.

Build a simple pricing reference. Not a 50-page manual. Just a one-pager with your 20 most common jobs and the price range for each. Post it in the shop. Put it in every truck.

When every quote starts from the same baseline, you stop leaving money on the table and stop creating customer confusion when they compare experiences.

Getting your complete pricing together is similar to the complete job costing work that keeps construction bids profitable. Same principle applies to plumbing service.

A Better Way

The manual audit works. Do it consistently for a month and you'll find thousands in recovered revenue.

But here's the limitation. You're always catching leaks after they happen. The money already walked out the door. You're doing forensic accounting instead of prevention.

This is where automation starts making sense. Not to replace your judgment, but to make capture automatic.

Field service management platforms with integrated pricebooks can suggest likely materials and charges based on job type and templates, though techs should always review before finalizing. Speech-to-text features can speed up job notes, making it easier to capture what was actually done.

Or consider rule-based automations: every after-hours call (based on dispatch time) automatically triggers a premium charge that someone has to manually remove rather than manually add. It's not perfect. Jobs that run long or get rescheduled need human review. But it shifts the default toward billing rather than forgetting.

Some systems can flag invoices where materials billed fall below the typical range for that service type. This requires consistent job codes, enough historical data, and periodic tuning, but it can catch obvious misses before they become patterns.

These capabilities exist across various field service platforms. They're not plug-and-play magic, but for shops that have fixed their manual processes first, they multiply the impact.

The techs who forget to bill fittings aren't doing it on purpose. They're focused on the work. Automation catches what their attention misses.

This connects directly to capturing scheduled revenue. Once you stop losing customers to no-shows, you need to make sure you're actually collecting full value from the jobs you do complete. Accurate billing on every job becomes the foundation for customer trust and recurring revenue.

Start This Week

You don't need software to run your first revenue audit. You need 15 minutes on Friday, a stack of invoices, and the willingness to look at what you find.

Most shop owners who do this are surprised. Not by the big obvious misses, but by the pattern of small ones. The $15 here and $40 there that compounds into real money.

Fix the manual process first. Build the habit. Train your team on the checklist. Then, when you're ready to scale that discipline, automation can take it further.

If you want help identifying where your specific revenue leaks are hiding, or building systems that plug them permanently, let's talk. Sometimes a fresh set of eyes on your invoicing process finds the patterns you've been too close to see.