Billable hours: What they are and how to calculate them Article

With Hiveage you can send elegant invoices to your customers, accept online payments, and manage your team — all in one place. The importance of your project management will depend on how you work. It could be that you’re a designer working on several projects at once. Alternatively, you may be a writer who only ever has one job at a time.

• Employee rate, used when the time is tracked by a specific user (eg. writer, designer).
• These hours include all the time that you spent working on a certain task.
• If a consultant has a total of 2,500 billable hours, we’ll divide this number by 2,000 .
• Some industries maintain a general standard of billing clients by the hour.

Below are nine ways you can increase your profit margins when you track billable and non-billable time. Ultimately, tracking all your employees’ time helps you see the full picture of how time is spent within your organization. Without knowing where all of your team’s time goes, you miss out on critical data that can help you make improvements and changes to your processes. When you only get paid for your billable time, you might wonder why you should even track non-billable hours at all. By tracking time, you can aim to ensure that the profits you receive for your billable time covering the costs of those activities that do not bring profit to your business.

Project Management Reports to Surface Key Project Insights

This will help you allocate work in a way that maximizes profitability on each project. It’s one thing to track and understand billable and non-billable time. It’s another to know how much billable time each employee on your team should be working. You will also produce more accurate estimates and quotes. Historical timesheet data from previous projects can make it much easier to provide accurate estimates when you bid for new business, or when you have ongoing projects with changing scopes. The standard process for calculating billable hours looks something like this. While it might be faster to bill for blocks of time, list tasks separately for accuracy, accountability, and clarity to clients.

No matter the type of your industry, be sure to accumulate enough billable hours because they’ll cover your non-billables. Ideally, you should have more billable than non-billable hours. Let Hubstaff ease the pain of calculating billable and non-billable hours. Inside Hubstaff, you can set up individual projects based on your unique clients. If you’ve been using Hubstaff, then you’ve probably already done this.

Legal Fee Financing Vs. Payment Plans: What’s Better for Your Clients?

This is a better option than manually tracking it as you’ll have the evidence to back up your invoice. If this is how you earn your income then you need to know which tasks count as billable time, how to calculate billable hours, and how to increase your total billable hours. We’re going to take a look at that here so you can make the most of your time. For example, an attorney working in a corporate law firm will have different demands and billable hours than an attorney working as in-house counsel for a large corporation.

It will also allow all of your employees to spend more time on higher-level, more profitable tasks. There are a few reasons why tracking billable hours makes sense for your business. The most obvious reason is that it helps you figure out how much to charge clients.

Agreeing on an Hourly Rate

The weekly billable hours values appear in the rightmost column shaded in blue. ”, but they cannot find the right answer, as Jira lacks this feature. Luckily, ActivityTimeline may help users with this issue as it allows them to log billable & non-billable hours. This is very useful for companies of various sizes, in-office, and remote teams.

• Billable hours are typically measured by recording time in six-minute intervals.
• There are a few reasons why tracking billable hours makes sense for your business.
• She’ll export this report as an Excel spreadsheet – Exporting Reports.
• Track every minute you spend working on a client’s project to increase your billable hours.
• To make sure you don’t overlook any of your billable hours, track them in real time.

For the most part, any time dedicated to a client’s project is deemed to be billable. For example, any time a lawyer spends reading documents, constructing arguments, or investigating a case that pertains to a client project, these hours are considered billable. If your client thought the task may take three hours but it actually took five, then you need to charge for the five. Instead, the client has made a mistake by underestimating the task. This is why whenever you’re doing a billable task, you lock yourself into that one task and don’t get distracted by anything else. This makes it a lot easier to track time for your work tasks and be confident when invoicing for your billable hours. There are other tasks related to your client’s project that are also non-billable hours.