Overview
Billable vs. non-billable designation separates time that can be charged to clients from internal activities, admin work, and business development. This classification is fundamental to professional services profitability and accurate client invoicing.
Billable Time
Direct Client Work
- Project deliverables
- Client meetings and communication
- Research for client matters
- Travel to client sites (if billable)
Documentation
- Client reports and deliverables
- Project-specific documentation
- Client presentations
Non-Billable Time
Administrative
- Timesheet completion
- Internal meetings
- Email management
- Training and professional development
Business Development
- Sales calls and proposals
- Marketing activities
- Networking events
Internal Projects
- Company initiatives
- Process improvements
- Tool evaluation
Key Metrics
Billable Ratio
Billable hours / Total hours worked
- Target typically 65-80% for most firms
Utilization Rate
Billable hours / Available work hours
Realization Rate
Actual amount billed / Billable hours logged
- Accounts for write-downs and discounts
Benefits of Tracking
- Accurate client billing
- True project profitability understanding
- Resource allocation optimization
- Pricing strategy inform ation
- Performance benchmarking
Best Practices
- Clear guidelines on what's billable
- Default classifications for common activities
- Easy toggle between billable/non-billable
- Regular review of classifications
- Client agreement alignment
