What an hour meter counts
Before you bill on it, know what "an hour" means on your machines, because it varies.
| Meter type | What it counts | Effect on billing |
|---|---|---|
| Engine-run hours | any time the engine is running, including idling | most common; generous to you, so set the allowance accordingly |
| Key-on hours | time the ignition is on | over-counts badly; avoid billing on this |
| Load or work hours | time above a load or pressure threshold | fairest, but only on machines that support it |
| Rotation or cycle counters | strokes, cycles, revolutions | used on breakers, compactors and similar |
Most compact plant records engine-run hours, which includes idling — and idling can be a large share of a working day. That is not a problem, but it means your allowance should be set against real observed usage rather than a theoretical working day, and it means your terms should say plainly that hours are measured by the machine's own meter.
The standard commercial model
Three approaches exist; only one is comfortable for both sides.
| Model | How it works | Verdict |
|---|---|---|
| Pure day rate | time only, hours ignored | simple, but heavy users are subsidised by light ones |
| Pure hourly | charge per recorded hour | customer cannot budget, and you cannot plan the calendar |
| Day rate with an hourly allowance | day rate includes N hours per day; extra hours billed at an excess rate | the workable standard |
The third model works because it keeps the calendar-based booking that your fleet planning depends on, while attaching the wear cost to the customer who caused it.
Typical shape:
- Allowance: commonly eight hours per rented day, cumulative over the hire. A five-day hire therefore includes forty hours in total.
- Excess rate: a per-hour charge for hours beyond the allowance, usually set at a fraction of the day rate — you are charging for wear and consumption, not re-renting the machine.
- Weekly hires: express the allowance as a weekly total rather than per day, so ordinary variation between days does not generate small charges.
Publish both numbers on the price list next to the day rate. An excess charge that first appears on the invoice is a dispute; the same charge quoted in advance is arithmetic. The wider structure of rates, allowances and extras is covered in How to Price Equipment Rentals.
Setting the allowance
Set it from your own data, not from a competitor's board.
1. Collect readings for a season. Record handover and return hours on every hire, even before you bill on them.
2. Calculate hours per rented day for each hire.
3. Look at the distribution, not the average. You want an allowance that covers the great majority of hires without a charge, so that the excess applies to genuinely heavy use.
4. Set the excess rate against wear, not against the day rate. Work out the consumable, service and depreciation cost per engine hour, and price the excess above it with a margin.
5. Review annually, alongside the rest of the price list.
If a large share of hires exceeds the allowance, the allowance is too tight and you have turned a fairness mechanism into a stealth charge. If almost none does, it is too loose to do any work.
Recording the reading
This is where hour-meter billing succeeds or fails. The rule is short: a number typed into a form is a claim; a photograph is evidence.
At handover:
- Photograph the meter display with the machine identity visible in the same frame where possible — serial plate, asset number or an adjacent marking. A photograph of a display alone proves nothing about which machine it belongs to.
- Record the number in the handover document.
- Have the customer sign the document that contains it.
- Note the fuel state at the same time.
At return, repeat exactly. Then:
- Calculate hours used and compare with the allowance in front of the customer.
- If there is an excess, state it there and then with the arithmetic shown.
- Keep both photographs with the hire record.
Two further details worth building into the routine. Photograph the meter in daylight or with a flash, since digital displays photograph poorly at dusk and an unreadable photograph is no better than none. And record the reading before the machine is loaded, not after, so nobody is squinting at a display on a low-loader.
Broken and tampered meters
Both happen. Your terms should already say what occurs when they do.
| Situation | Practical handling |
|---|---|
| Meter fails during the hire | fall back to a stated default — typically the allowance for the period — and inspect the machine |
| Meter disconnected or tampered with | a term in the agreement should make this a chargeable breach; evidence is the handover photograph plus the return state |
| Reading lower at return than at handover | a meter has been replaced or interfered with; investigate before invoicing |
| Meter replaced during servicing | record the replacement date and both readings on the item card; carry the cumulative total forward |
| Reading illegible | do not guess — photograph what there is, note it, and resolve before the customer leaves |
Two principles behind all of these: never invoice a number you cannot evidence, and never resolve an anomaly after the customer has driven away. The conversation is easy while they are standing next to the machine and hard by email three days later.
Hours as the service trigger
The commercial case for hour meters is only half the value. The other half is that hours are the correct basis for servicing most plant: filters, oils, greasing intervals and major services are specified in hours, not months.
Since you are already recording the reading twice per hire, use it:
- Store the reading against the machine, not just against the hire.
- Set the service schedule as an hour threshold, with a calendar backstop for machines that rent rarely.
- Make an overdue machine unavailable to book, rather than relying on someone noticing.
- Keep the service history against the same item record, so cost per hour is calculable.
That last figure — total cost per engine hour over the machine's life — is the number that tells you honestly whether a machine is worth keeping. The record-keeping structure for it is set out in Inspection and Service Records for a Tool Hire Business.
Explaining it to customers
Hour-meter billing is normal in plant hire and unfamiliar to occasional customers. Three sentences at booking prevent nearly every complaint:
- "The day rate includes eight engine hours per day, added up across the whole hire."
- "Anything above that is charged at the excess rate on the price list."
- "We photograph the meter with you at collection and again at return, and we will show you the calculation before you leave."
Put the same three lines on the booking page and in the agreement. A customer who knows the machine is metered simply switches it off during breaks — which is exactly the behaviour you were trying to encourage. The handover sequence this fits into is described in The Equipment Rental Handover.
Where Flotello fits
In Flotello, a machine can carry a usage allowance and an excess rate alongside its day rate and deposit, and the handover and return records capture the meter reading together with the required photographs and both signatures — so the excess charge on the invoice traces back to two dated pictures rather than to somebody's memory. There is a seven-day trial without a card.