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billable hours

While a cleaning company may only spend a few hours on the job, they’re normally charging a flat rate to their clients while a law firm might charge by the hour. Finally, tracking non-billable time gives you a more accurate picture of upcoming capacity. When managers and project leads understand that they can’t book employees at a 100% utilization rate, they’re less likely to burn out their teams. But as we already discussed, you have to track both billable and non-billable time to calculate a reasonable utilization rate for your staff. This blog post will explore how a billable hours chart can help lawyers better track time for invoicing.

What’s the average number of billable hours in a year?

The average number of billable hours differs based on the industry and role. However, according to the Agency Management Institute, the average billable time for Agency Production Managers is 1,504 hours a year and 1,410 hours a year for Creatives.

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. These issues could happen due errors in pricing systems, or due to duplicate work, and etc. The concept of billable versus non-billable hours is widely used in the legal profession. In fact, many law firms require that their attorneys track their time throughout the work day so that all billable and non-billable times can be accurately recorded. Digital time tracker or manager is designed to record your working hours.

Knowing Your Total Billable Hours

It helps to simplify billing clients and provides data to support your invoicing. Such tools are ideal if you offer legal services or other work where keeping accurate records of billable hours is crucial. If you track all your time, not just your billable hours, you’ll be able to look back at your work day and see where you can become more efficient.

  • It goes without saying that if your company charges clients by the hour, you can’t bill fairly or transparently without accurate billable hours data.
  • General administrative tasks, networking, or furthering your education in the field do not count as billable time.
  • In fact, many law firms require that their attorneys track their time throughout the work day so that all billable and non-billable times can be accurately recorded.
  • Instead of manually calculating or using a chart to determine time increments, Clio lets you pre-set rates and automatically round time entries to the increment.
  • Non-billable hours include tasks that must be done but aren’t directly attached to a matter, such as administrative tasks.

Don’t worry about the task at hand, just start tracking your time and get on with it. We mentioned social media there but a lot of the procrastination can become before a project even gets started. Much of this is putting it off as you’re not fully confident. When you take that approach, you’ll see a huge increase in output. Importantly, it also means that all of your work is being paid for.

A sample billable hours chart

It’s also because as a for-hire organization, word of mouth is everything, and you don’t want to put yourself in a position where the client is giving you bad reviews. Of course, client relations matter, and different clients will require different levels of management. But if a client actively prevents you from doing your work in an efficient way, or consistently demands additional hours for which you cannot bill them, it’s time to make a change. P.S. Everhour offers a perfect time tracker to help you measure and monitor your billable and non-billable time with ease to boost your business success. Prove how much time you spend working, so it can be easy to negotiate a higher salary or billing rate. If you have a good automated invoicing system, you will stay consistent and thus avoid missing invoices. It is standard practice to send invoices monthly but for projects that need more resources, you can work out a bi-weekly schedule with your client.

One of the best ways to track your team’s hours is with Hubstaff. Our robust time tracking app makes it easy to track time, activity, and progress on projects all in one place. Here’s a step-by-step guide for accurately tracking and calculating billable hours to help you increase your profits and maximize your billable time. Non-billable hours are hours that a law firm’s client should not pay for. These include truly wise time investments such as continuing legal education, networking, and rainmaking, for example. Non-billable hours also include timekeeping , other administrative functions, and errands, for example. Tracking both billable and non-billable time helps you understand the true costs of running your business, assign realistic workloads to employees, and provide more value to your clients.

Billable Hours Sample Clauses

Continue reading to understand what is billable work, how to calculate billable hours, and how to keep track of the work for invoicing your clients . If you’re more like the former, then you’ll need a more robust solution for tracking your billable hours.

The logged work can be later approved or disapproved by the Manager. Billable Hours.The following is applicable to Therapists providing Outpatient level of service. Thru Nov 7th, get Indy Pro for just $9.00 $6.50/mo or $81.00 $59.00/yr for the life of your plan. Increase accuracy and get your team’s timesheets without fuss. Sync data and build powerful workflows using your favorite tools like Zapier, Jira, Harvest, Toggl, or a customized one using our API.

How to track billable hours to increase profitability

You can raise rates, renegotiate contracts, or reduce hours, but it’s critical that you and your client are on the same page. This is not only because giving away hours and over-servicing clients costs your organization a great deal.