Understanding and Tracking Time with a Billable Hours Chart

define billable hours

And that’s just one step to recording and being paid for billable hours. Lawyers can track billable hours with a billable hours chart, which will save them the time, effort, and frustration of calculating the hours manually.

  • Billable hours include all the time an attorney spends actually working on a matter or even thinking about a matter.
  • In fact, time spent on non-billable activities is probably the most valuable to your company in the long run.
  • Tracking non-billable hours will also help you make sure you’re not burning out your employees because it helps you gain a true understanding of their full workdays.
  • Here are the main reasons why keeping track of your non-billable hours is significant for your company and your clients.
  • In this article, we’ll cover everything you need to know about the billable hour model, how to set your billable rate, and how to track and increase the number of billable hours.
  • Even though the term billable hours is vastly used in legal practices, it is also used in all other sectors where someone needs to be reimbursed for working on a project.

The first step in calculating your billable hours is understanding which work is billable and which is not. Establish the portion of your day that was spent on billable work, and split that down into hours. We’re the world’s leading provider of cloud-based legal software.

Dictionary Entries Near billable hour

Keeping good track of your time will help you to figure out where you may be wasting it! 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.

  • Billable Hoursmeans all time during which Licensor provides active solution of Licensee’s problems as initiated by Licensee’s call.
  • However, you have to have a record of your time worked to bill that time to the client.
  • Taking another short break a couple of hours before finishing work for the day.
  • That time is difficult to bill your client, but these hours have been already gone and you cannot take them back.
  • Luckily, if you efficiently upgrade the way you count these hours, then you may see positive growth in the future.

Intuit Inc. does not warrant that the material contained herein will continue to be accurate nor that it is completely free of errors when published. I’ve been using Hiveage’s predecessor Curdbee for years, and Hiveage improves on Curdbee in every way. The interface is polished, fast, fluid and intuitive, and the amount of features available are pretty amazing. It will be my project management software for the foreseeable future, and the only one I recommend to clients and colleagues. These are critical because they determine the income of a worker based on how much time they spend working.

Industries that Typically Bill by the Hour

Calculating an appropriate rate is essential, particularly for companies that depend on income from clients for most or all of theirrevenue. Typically, employees are expected to have billable hours equivalent to at least three times their salaries.

  • Speaking of working hours that you won’t charge your clients, be sure that tracking non-billable hours is essential for your company.
  • Then, take the salary you have in mind and divide it by the number of working hours in a year.
  • In other words, they’re the number of hours a company can charge its clients for doing work on their behalf.
  • There are some repetitive assignments, such as administration, which can consume a lot of your time and you’ll track them as non-billable hours.
  • The type of tasks that fall into the billable bucket will vary from business to business.

For instance, if there are too many internal meetings, this can result in more non-billable hours. No matter the type of your industry, be sure to accumulate enough billable hours because they’ll cover your non-billables.

How to increase billable hours

And to do that, you need to understand how much time you spend on each type of activity. Five minutes for an email here, half an hour for an unplanned call there — this is how billable hours go unnoticed if you don’t track them. By making an effort for billable hours tracking, you can get the real picture of just how much time your team invests into projects. Not to mention the regular daily activities like having lunch or taking a short break from work.

You should have all your billable hours stacked up at this point, and you’re ready to create your invoice. Now it’s time to start tracking the time spent on client work. In this guide, we’ll talk about some of the exact methods Sweat+Co used to track their billable hours, increase their efficiency, and boost their profits. If you run a team, tracking your non-billable hours will help you figure out where your team members are the most productive. For example, let’s say client X has asked for a multitude of changes to a project where you spent 15 extra non-billable hours for the month. Tracking your billable hours by the project will also help you determine your most profitable clients.

A sample billable hours chart

Tracking billable and non-billable hours will help you to bill your clients without underestimating or guessing the amount of time you’ve spent working. You will get paid for what is worth without underselling your services. Tracking will help you know how much time you spent on a project and what tasks took up the most time. This will help you create better estimates for what are billable hours future projects, and reduce the chance of unhappy clients. You’ll also be able to identify which clients or projects use more of your time than others and adjust your rates accordingly. You can track and record all the hours spent on the project and then separate billable and non-billable hours or you can simply record billable hours and leave out non-billable hours.

Also, we’ll cover how other tools can make tracking attorney hours even easier and more accurate. For IT service providers, though, an 80% organization-wide utilization rate makes your company an industry leader.

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This is how you can assess key areas where you need extra staff or additional training. Approve time registrations and put all the billable hours together. Setting a real-time tracker is better than logging hours manually.

What are billable hours?

Billable hours are the nr. of hours spent working on a specific project and client. They include things such as client email communications, content creation, or unexpected revisions. Billable hours are directly related to a project and don’t include training, recruiting or bookkeeping.

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