Billable vs Non-Billable Time Designation

A pricing model where clients are billed for actual labor costs (tracked time × labor rates) plus a markup percentage or fixed fee to cover overhead and profit, requiring accurate time tracking and transparent cost documentation to justify billings and maintain client trust.

Practice of categorizing work hours into billable (client-facing, revenue-generating) and non-billable (administrative, internal) categories. Critical for professional services firms to maximize revenue capture and understand true project profitability.

Practice of tracking all work hours throughout the day without gaps, ensuring complete accountability and accurate payroll. Every hour is assigned to a project, task, or category, creating comprehensive data for billing and analysis.

Key performance metric for professional services firms measuring the percentage of working hours that can be billed to clients. Critical for understanding productivity, profitability, and resource allocation with industry benchmarks typically ranging from 60-85%.

Legal billing best practice of recording time immediately as work is performed, rather than reconstructing hours retrospectively. Supported by ABA Model Rule 1.5, this practice ensures accuracy, prevents revenue loss, and maintains ethical billing standards.

A time tracking system configuration allowing different hourly billing rates for various employee roles, seniority levels, or skill sets, automatically applying the correct rate when generating client invoices based on who performed the work, essential for professional services firms with tiered pricing structures.