It’s easy to forget to record your daily project-related and billable tasks. Many small businesses use a monthly invoice schedule and send out their invoices at the end of each month. Other companies invoice their clients twice a month, based on the volume of work tasks. Your https://www.bookstime.com/articles/prepaid-insurance-definition-and-examples target doesn’t have to be a fixed fee and can alternate from client to client. Both billable and non-billable hours should be treated like a precious resource and tracked and scheduled accordingly. You calculate utilization by dividing the total hours worked during the year by billable time.

I did this for a period of time, but I quickly realized it was duplicative to enter my time into a chart and then enter it again into our billing software. But whether you will enter your hours directly into your software or into your own chart really depends on the user-friendliness and accessibility of your employer’s billing software. You can print the attorney billable hours chart and keep it near your desk, or bookmark this webpage and return to it whenever you need.

Software that can help your track billable hours

There are many software options out there, designed to aid resource and practice management. This software not only helps offices keep track of billable hours, but also makes other useful tasks easier, like productivity analysis, costing, reports, invoicing, and accounting. It can be difficult for lawyers, consultants, accountants, and other professionals who combine billable and non-billable time to keep track.

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Bill clients

No matter the type of your industry, be sure to accumulate enough billable hours because they’ll cover your non-billables. Ideally, you should have more billable than non-billable hours. If a significant amount of your time is spent on non-billable tasks, you may no longer be very productive. So, if anything urgent needs to be addressed, you can see to it right away.

• For example, Jane is currently working on an administrative project for Client A when Client B calls her, frantic because her computer crashed and she can’t enter her payroll.
• Many firms expect attorneys to reach minimum billable hour requirements ranging between 1,700 and 2,300 hours per year.
• But, there’s also a certain weakness of a utilization rate system, especially applicable to consulting businesses.
• They spend their days trying to waste time and amuse themselves, often at the expense of their friends or themselves.
• So, in the PR industry, the utilization rate depends on position within the business.

Liam Martin is a co-founder of Time Doctor which is software to improve productivity and help keep track and know what your team is working on, even when working from home. By default, Time Doctor shows you all the work time tracked by a user as billable or payable. If no response is registered within 60 seconds of showing the pop-up, the time tracker stops on its own. You can run an online report to see how much money you’ve earned. When the time comes, export the report as PDF, Excel, or CSV, or share a link to the report with your client.

Calculate Your Total Billable Hours

Administrators of law firms should track both realization rates and utilization rate of employees. In addition, there should be a monthly report that makes a comparison between the billable hours that are recorded, and fees collected. In general, when lawyers have less than 100 percent of their billable hours, this could be an indicator of a problem.

Typically, employees are expected to have billable hours equivalent to at least three times their salaries. You can use a productivity management solution like Time Doctor to track your billable hours and create an invoice effortlessly. When clients can see the details of the work done on their case, in clear, simple, language, there is less confusion and fewer disputes over billing. Once you have a salary in mind, divide it by the number of working hours in a year, which is 2,080 hours for a full-time job.

Best practices for billable hours

Clockify is a time tracker and timesheet app that lets you track work hours across projects. While you can use manual methods to track and calculate billable hours, they can be inaccurate and unreliable. In this article, we’ll explore everything you should know about calculating your billable hours. We’ll also highlight the best tool you can use to calculate your billable hours accurately. More importantly, you have to ensure that you accurately track the time spent on projects and bill clients accordingly.

• By knowing exactly which tasks constitute billable hours and how to keep track, you’ll be ready and set to optimize everything from workflows to invoicing.
• The term, “billable hours” can sometimes cause confusion because people in many different professions charge for their work through invoicing.
• It’s called the realization rate – how many hours an attorney tracks compared to the fees that are collected.
• That said, there are many reasons attorneys might choose to create their own chart.
• Of course there are many professional tools for you, but here I will guide you to create a billable hour table in Excel, and save it as an Excel template easily.
• At the end of each billing cycle or when you complete a client’s project, review your time log and calculate your total billable hours for the project.

After all, your time is valuable, and every minute spent on billable hours will help you scale and increase your business’ profitability. You may even realize you need to hire an extra employee, a virtual assistant, or turn to specific software to automate some of these non-billable tasks. When you track every minute you spend on a project, you may be surprised to learn just how many tasks constitute your billable hours. While this sounds like a chore, all of these little inclusions will add up throughout a project.