Should Contractors Itemize their Bills?

Angie Hicks
Written by Angie Hicks
Updated January 29, 2016
itemized or flat rate contract
Unless the consumer is well versed at how much each step of a large home improvement projects costs, an itemized bill can look more like a puzzle than a potential money saver. (Photo by Katie Jacewicz)

Dear Angie: Should contractors itemize their bills? Is that the norm, or is flat rate becoming the norm? -- Roger E., Parker, Colo.

Dear Roger: Flat rate bills have definitely become more popular than itemized bills in recent years.

Several highly-rated contractors our team spoke with say flat rate bills are better for customers because they make it easier for them to shop around for better prices.

Flat rate bills can also prevent contractors from adding extra, or unnecessary, charges to bills during or after the work has been completed. That can result in a larger than expected bill.

When contractors run into problematic areas of a repair or remodel, a pre-negotiated flat rate price can also save money because consumers are not paying by the hour, just the job.

On the other end, contractors can benefit if they are faced with few roadblocks and complete a job ahead of schedule. For contractors, flat rate bills are also a quicker way to invoice and the bills are easier to understand.

Contractors say car dealerships, body shops and many other businesses have been using a flat rate system for years. Because contractors buy parts from several vendors that charge various prices, some say it's not fair for one neighbor to be charged less for a part on an itemized bill and another to receive a higher price. Flat rate bills can average out the prices.

A flat rate bill can also eliminate a customer's feeling they are being nickel and dimed.

Some highly rated contractors say that nearly all responsible contractors are using some type of flat rate system. Unless the consumer is well versed at how much each step of a large home improvement projects costs, an itemized bill can look more like a puzzle than a potential money saver.

When searching for a contractor:

Most importantly, get three estimates to check that the flat rate price sounds fair. It may take a little extra time on your part, but it can result in big savings. If you don’t agree or trust a flat rate estimate, move on.

Make sure the company is bonded and insured.

If you need a payment plan, read the fine print and check for any hidden costs.

Editor's note: This is an updated version of a story originally published Feb. 18, 2014