Tracking billable hours helps you properly allocate tasks across your team. You can assess everyone’s workload and ensure they’re able to manage their tasks. This is important for employee morale in the workplace and can also be helpful for meeting the scheduling needs of all team members. Billable hours are a key income source, so tracking them is essential for measuring your income-to-expense ratio.

Who needs to calculate billable hours?

The dashboard in the image above clearly shows an overview of all active tasks, including their current status (in progress law firm chart of accounts or pending feedback), priority levels, and other information. You can also offer a trial period if you want clients to get a feel of your work before committing to your agency. But it wouldn’t have been perfect without the brainstorming sessions, internal revisions, and meetings, which are important but non-billable. Over the last 12 months, the Acronis Cyber Protect Cloud platform has expanded significantly with new solutions, features and capabilities to empower MSPs.

How to Calculate Billable Hours the Right Way Step-by-Step

If you charge different rates for different services or individuals, make sure to keep all the hours for different services separate. For example, you may need to add up research hours, meeting hours, and work hours as three separate service lines. If you charge a single rate for all your services and clients, this step is straightforward. If you charge different rates for services or clients, try outlining your rates in a table to ensure clients understand what they’ll pay for different billable hours. 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.

Track the number of hours worked

To maximize on an attorney’s billable hours, some law practices resort to increasing their overall work hours to upward of 70 or 80 hours per week. For lawyers, consultants, accountants, and other professionals with billable work, client payments don’t apply to other work tasks done for the firm to which they’re professionally affiliated. It goes without saying that no staff member wants their hard work going unnoticed. So, the benefits of staying abreast of each employee’s billable hours should never be underestimated. This report shows your team’s tracked billable and non-billable time over the past 30 days by default. Researchers from UC Irvine found that for every distraction or context switch, it took 23 minutes and 15 seconds for workers to get back on task.

• Calculating billable hours by tenths (i.e., converting hours and minutes into decimal numbers) involves dividing an hour into six-minute increments, each representing 0.1 of an hour.
• Once you have a complete picture of both non-billable and billable time, you can make more informed decisions about how to allocate resources effectively.
• This blog explores seven ways Acronis Cyber Protect Cloud helps your clients with insurance and compliance.
• Some people may feel like they’re being micromanaged if they have to track their hours, while others may find it empowering because it gives them a sense of control over how much money they make.

If you regularly work on similar projects, you can save this as a project template to duplicate later. The next step focuses on organizing project work for efficiency and visibility. Secondly, all you need to do is access one dashboard, and you have all your employee information aligned together. The People Dashboard depicts all the pertinent information like the cost of the previous pay run and estimates of the upcoming one.

To make sure you don’t overlook any of your billable hours, track them in real-time. Record your start and end times for each project as they happen, rather than looking back at the end of the day and trying to add up all the billable hours you spent on a client’s project. Bill4Time time tracking features don’t go beyond anything offered by a more straightforward, affordable platform.

Typically, junior employees working directly on client projects will have higher utilization rates, while leaders and executives involved in strategic decision-making will have lower rates. Understanding these distinctions can help you establish realistic targets for each role. For example, if you charge $50 per billable hour but spend additional hours preparing, you might only be breaking even, not making a profit.

• We’ll also take a look at the benefits of tracking billable hours and strategies for increasing billable hours to help you increase profits and grow your small business.
• Soon, those who want it may even become “champions” who can spread the word to colleagues.
• Bill4Time automatically generates a simple graph showing your firm’s financial state.
• The only way to accurately understand your team’s billable vs. non-billable hours is to consistently track time.
• First, it’s important to understand that there are alternatives to using billable hours.
• This data-driven approach allows for more accurate and fair performance evaluations.

To make it easier to track your billable hours, streamline the number of apps you use. Specifically, instead of using separate apps for video conference calling and messaging, try to find a versatile app that can provide different communication channels in one place. The term “billable hours” can sometimes cause confusion because people in many different professions charge by the hour for their work through invoicing. We’ve compiled a guide that will tell you everything you need to know about billable hours and the tools you need to start optimizing outputs as soon as possible. If you notice an employee has spent too much time on non-billable adjusting entries work, hover over the specific task or project to see exactly what’s taking up their time.

In order to maintain your company’s profitability, you have to calculate how many billable hours are needed for every single project and, on this basis, send an accurate invoice to the client. Accountants calculate billable hours to bill clients for financial services, like preparing taxes, auditing, and consulting. It what are billable hours helps build transparent client relationships, invoice accurately, and assess profitability. When you’re able to view accurate data about your employees’ time, you’ll be able to see whether or not you’re billing for more hours than the amount you’re spending. If you are still looking for the best way to track billable hours, you don’t want to miss Forecast’s massive Utilization report either. It automatically tallies up your billable hours from the timesheets, calculates utilization rates as well as tracks hours spent on non-billable work.

Read more...