Billable vs Non-billable Actual Hours Examples & Invoicing

With Productive, you can even use automatic reminders to increase the chance of getting timely payments. Tracking billable hours is of paramount importance for several compelling reasons. Understanding the time investment required for a project empowers you to establish an hourly rate that ensures profitability and sustains your business. On the other hand, if you run a law firm where attorneys charge by the hour, then tracking billable hours makes a lot of sense because it’s a good indication of how much work is being done for clients.

Helps in Performance Evaluation & Incentivizing Employees

If you have a time work, and earn your money based on actual working hours, how to record your work hours and calculate earned money? Of course there are many professional tools for you, but here I will guide you to create a billable hour table in Excel, and save it as an Excel template easily. By adopting the strategies discussed, every firm can boost revenue, improve resource management, and strengthen client relationships. These practices enhance profitability bookkeeping and keep firms competitive in a challenging and ever-evolving market.

Billable hours examples

What qualifies as billable hours varies between projects and industries. The important distinction is that billable hours must be directly related to and necessary for a client project. Billable hours are the time spent working on tasks directly related to a particular client project. In the following section, we’ll consider some of the main challenges https://www.bookstime.com/articles/accounting-and-bookkeeping-for-small-business that make tracking billable hours complicated, and offer potential solutions to tackle them. One of your electricians, Sam, spends six hours installing new wiring at a client’s site.

• In fact, by viewing the percentage of availability of your resources across certain periods of time, including by skills or seniority, you can also fuel sales efforts.
• Tackle revolutionizes time tracking through seamless calendar integration, eliminating the need for manual logging.
• Agencies in other industries will more likely target other metrics of success, such as the utilization rate (or billability), which shows the percentage between non-billable and billable hours.
• Salaried employees usually receive their wages depending on the total number of hours worked in a day, including both billable and non-billable work.
• Initiate seamless resource planning for your upcoming project using the top-rated resource management and timesheet software, eResource Scheduler.

Harvest: The Time Tracker That Makes Invoicing Easy

This approach enables me to create more room in my day for high-impact tasks, boosting my overall efficiency. While some idle time is unavoidable, too much can affect your productivity. A time audit helps you pinpoint these gaps to plan more effectively and minimize wasted minutes. Seeing your total hours and earnings for a period is important for many reasons, from invoicing clients to analyzing your productivity. Once you’ve got your hours worked, it’s time to apply your billable rate to see how much you’re earning. By using this formula, you’ll ensure that your hours are accurately calculated and automatically updated if you change your start or end times.

Why Is Tracking Billable Hours Important?

Non-billable hours are spent working on tasks not directly related to client projects. Even though this work may be necessary for running your business, it’s not required to complete a particular client project, so it can’t be billed to the client. You can bill your clients by manually drafting an invoice after calculating your billable hours. Preferably, you can use also accounting tools or all-in-one solutions such as Productive to generate your invoice automatically. Productive pulls in your uninvoiced amounts automatically, so you don’t have to double or triple-check your data for manual errors. Additionally, you can immediately attach your relevant timesheet to speed up the payment process.

• SAVIOM offers advanced utilization reports and color-coded heatmaps to identify billable and non-billable projects and optimize employee utilization levels promptly.
• For example, a client may express discontent during billing when a project meeting is considered a billable task.
• Organizations must ensure consultants can take ownership of tasks, complete projects, and bill fairly.
• Once the assessment is made, it is necessary to determine the price for the specific job based on the employees’ billable rates.
• For example, Forecast is an all-in-one tool you can use for project management, invoicing, time tracking, and administrative work.
• The calculator provides the total income based on your hourly rate and the number of hours you worked.

Time tracking

Regularly review your rates to ensure they reflect your expertise and market demand. Tracking and recording that time, invoicing for that time, and determining the productivity of that time is far more challenging. Flexible work arrangements refer to alternative schedules allowing employees to vary their work hours, location or structure. what are billables These arrangements can include options such as working from home or flexible start and end times, according to the report accompanying Resolution 506.

What Is Excessive Daytime Sleepiness, and What Causes It?

These hours are basically invoiced to clients, forming a key income stream and directly affecting revenue, overall profitability and client satisfaction. In addition, billable hours also factor into computing billable resource utilization, which is a key metric for assessing consultants’ performance. Most service businesses – digital agencies, accounting and law firms, consulting companies – use billable hours to charge their clients for the services they provide. Understanding billable hours, they’re able to see how much time employees spend on revenue-generating work.