calculating billable hours

You can accurately track time for all your tasks and projects using Time Doctor. What you should consider with non-billable hours is how much they’re worth to your business. If there’s a lot of training involved with what you do, then those hours should be given more importance. However, if your company works off the old “time is money” adage, then maybe you should find ways to cut down on non-billable hours. Billable hours for lawyers are the attorney work hours billed to clients for activities that are directly related to client matters.

calculating billable hours

You don’t need an hourly rate calculator for this calculation. It has less to do with your industry, and more to do with your company itself. When trying to figure that out, look at how much non-billable time you currently use and see if that is providing a benefit to your company or not. Billable hours, for those who are unfamiliar, are pretty self-explanatory. They’re the hours that are tracked by an individual on a team as they’ve worked normal or overtime hours that can be billed to a client.

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As you work on a client or project, enter your times in and time out. The billable hours’ template does not account for non-billable hours.

If no response is registered within 60 seconds of showing the pop-up, the time tracker stops on its own. Don’t factor in any hidden administrative task while estimating the project’s total cost. Finally, you need to create a detailed invoice to send to your client. A non-billable task, like following up with a potential client. As you can imagine, it would be almost impossible to run a business without some non-billable work going on, no matter what type of company you run. We provide third-party links as a convenience and for informational purposes only.

What Are Billable Hours? Time Tracking Tips To Get You Paid

The following formula is used to calculate the total number of billable value earned from hours worked. If you charge different rates based on what you’re doing, be sure to categorize entries and group them around projects. When you work on something, use the work hours timer to measure how long you’ve worked. When you switch activities, stop the timer for the previous activity and start a new one.

You can use tools such as calendars and spreadsheets to help track your progress and make sure you are meeting your goals. To increase billable hours competitiveness of billable rates, businesses need to keep tracking billable hours vs non-billable in the regular and optimized way.

Billable Hour Calculator

How much time does your team spend looking to better themselves for the company? You can better track how much time everyone spends cracking away on projects versus how much time they spend researching industry trends and studying up on their specialty. Are you looking to figure out how to calculate billable hours for your business? If you’re a business owner or freelancer, this should be something you’re looking to master. Track your billable time accurately—and in real time, if possible. If you track your hours as you go, you’re less likely to lose out on hours that you forget about when tracking at the end of the day . Whether you’re a business owner or an employee, not every task constitutes billable hours.

  • You can also use this information to pay them fairly when billing clients based on hourly rates.
  • When employees fail to track their time properly, it can wreak havoc on company finances.
  • So for this specific client’s next project you’ll be able to calculate better fees by factoring in those non-billable hours properly.
  • Finally, I won’t defend the entirety of the scientific management movement as envisioned by Taylor.
  • When most firms decide on their billable hours, they have to be mindful of both the profitability and practicality of taking on a certain client.
  • Regarding billable hours, Saviom can help managers better understand their employees’ workflows, projects, and productivity.