Billable Hours vs Non-Billable Hours: How to Get Paid for Both


Billable Hours vs Non-Billable Hours: How to Get Paid for Both

billable hours

It’s also good to note that several other activities run simultaneously and have nothing to do with customer deliverables. The company still spends resources when undertaking such activities. The goal of any operations or activities in any organization’s office is to ensure quality deliverables as far as customers are concerned. Working with existing customers and signing in new ones is the desire of every business. With more projects, there’s a high chance that the organization’s top line will go up.

What activities are billable?

What is billable work? Billable work embraces all tasks that are directly related to the client's project. It includes every unit of work that you can put on your invoice to the client.

When you’ve set expectations for time devoted to billable work, as well as given employees room for non-billable tasks, you can see whose performance is truly lacking. But without recognizing the value of non-billable hours, you can’t truly know whose work is contributing to the growth of your organization. Eastwick was manually tracking time and planning resources with Excel spreadsheets. See how Eastwick integrated their time tracking and payroll systems to reduce non-billable hours.

How to increase billable hours – billable hours best practices

You will be able to filter reports, save them for future use, or send them directly to a client. Organizations turn to consultants for assistance in areas such as venturing out for new business, solving critical problems, introducing new operating procedures, or acquiring niche skills. Use this guide to learn 10 ways you can block out the distractions and increase your productivity in the office. This will help you determine what needs to be done first, what can be delayed, what needs to be done by you, and what can be delegated.

  • You can also use this information to pay them fairly when billing clients based on hourly rates.
  • You might want to look at how long you take to do low-value tasks or the time spent procrastinating on tasks.
  • This is the time that is actually being dedicated to work for a given client or on a particular project.
  • You probably have non-billable tasks you don’t like to do — or perhaps there are tasks that need to be done but aren’t the best use of your time.
  • 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.

Billable hours are how long you spend doing a project or activities directly related to a specific client. You can use a productivity management solution like Time Doctor to track your billable hours and create an invoice effortlessly. Non-billable hours are any that are spent on administrative or overhead projects that are not directly related to client service. It’s only natural to prefer to be spending your time on work which you will actually charge for.

Why Tracking Billable Hours Is Important for Law Firms?

You will be able to identify those non-billable tasks which might be taking up more of your time than they should, and make appropriate changes to streamline those processes. There are many ways for you to increase your billable hours smartly. Knowing the difference between billable and non-billable hours is crucial for good management. This article will explain more in-depth what billable and non-billable hours are, how you can track them, and why they are so crucial for your business.

What Law Firms Need to Know About Utilization Rate – The National Law Review

What Law Firms Need to Know About Utilization Rate.

Posted: Wed, 07 Jun 2023 07:00:00 GMT [source]

You’ll be able to identify which administrative task you should spend less time on – and redirect your energy to billable tasks instead. By tracking all your time (non-billable time included), your working day will be more productive, and you automatically send out new client agreements from wave accounting can be more efficient. For projects, list down the hours spent on each task – so you have an idea of what the client is paying for. Many small businesses use a monthly invoice schedule and send out their invoices at the end of each month.

Detail your invoices

It is standard practice to send invoices monthly but for projects that need more resources, you can work out a bi-weekly schedule with your client. When your employees spend most of their time on non-billable activities, it’s hard to grow your business without adding more people (which increases fixed costs). P.S. Everhour offers a perfect time tracker to help you measure and monitor your billable and non-billable time with ease to boost your business success. Invoicing helps businesses keep track of financial transactions and ensure steady cash flow for goods or services.

Executives and other members of the leadership team will have a lower utilization rate than a junior-level employee who is grinding out client work every day. Tracking employee time can tell you what the difference between those rates should be. If you’re constantly stuck in non-billable meetings, conference calls, or revisions with one client, that’s time you can’t spend on more profitable projects. Keeping track of and optimizing your billable and non-billable hours doesn’t have to be another dreaded task on your ever-growing to-do list.

Why is time tracking important?

Some industries maintain a general standard of billing clients by the hour. For example, lawyers typically earn their money from billable hours. Rarely—if ever—do you find a lawyer who charges clients based on how many documents they inspect or how many words they write.

billable hours

What are not billable hours?

Non-billable hours are the work hours you spend which are not going to be directly charged to the client. Some examples of non-billable work hours are things such as team meetings, staff development/training, or networking and attending conferences.