By tracking time more accurately, you can help yourself meet billable hours targets. You’ll also ensure clients are invoiced correctly and clearly, contributing to an optimal client centered experience. If you are required to track your billable hours, you may benefit from an automated time tracking solution. Some tools make it easy to track time against clients or jobs, so you can bill more accurately for the work you do.
Performance reviews and employee appraisals are made much easier with timesheets. Bi-weekly timesheets show the number of hours worked over a fortnight — 2-week period. A weekly timesheet template is useful if your payment or invoicing cycle follows a weekly schedule.
How to calculate billable hours using Time Doctor
Getting a good grasp of billable time is a key metric to understanding your business’ profits. You also get to see how much time your employees spend on revenue-generating work. Time Doctor integrates with software like FreshBooks, QuickBooks and several other tools to help you automatically calculate payroll and manage your client billing system. A billable hour is usually defined as an hour spent working on a client’s project. To maximize on an attorney’s billable hours, some law practices resort to increasing their overall work hours to upwards of 70 or 80 hours per week. A billable hours quota of over 2,000 hours per annum is not unheard of.
- And while there are hundreds of tools that can help you with timekeeping and productivity management, one of the best tools available today is Time Doctor.
- With its precise time tracking features, the app ensures accurate measurement and allocation of billable hours.
- Once you’ve got a good idea of how much time you’re spending on billable tasks, you can begin to calculate your billable hours.
- For example, attorneys in legal firms must work a certain number of billable hours each year.
- You’ll simply have to start the digital timer in your accounting software and assign the time to the relevant client.
- A law firm might use practice management software that includes built-in time-tracking software.
Alternatively, you can hire someone else to do non-billable tasks for you. That way, you’ll gain sufficient time to focus on the core issues that will help develop billing hours your business. The solution to maximizing your billable hours and increasing productivity is to remove any kind of distractions during working hours.
Track All Your Billable Hours
The first step to calculating billable time is to come up with an hourly rate. You’ll want to do thorough research so you can offer a rate that’s similar to what other businesses in the same line of work are offering. Here are some ways to use software and solutions to help track billable hours accurately. It can be difficult for lawyers, consultants, accountants, and other professionals who combine billable and non-billable time to keep track.
Time Doctor gives you access to seven types of reports that can help you analyze how productive you and your team members are. You can even export these reports as Excel or CSV files and store them for reference. Then, divide your annual expected earnings by the number of working hours per year. It’s usually 2080 hours for a full-time job, but you can adjust your working hours the way you want to. Meanwhile, it might be challenging to work with client X as they would require a lot of time and attention — limiting the number of clients you can take up. Clearly, client Y doesn’t drain you of your resources and time so that you can focus on other clients as well.
What Are Billable Hours and How to Get Paid Accordingly
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. The first step to track your billable and non-billable hours is to create (and name) a project and all the tasks you want to track under it. Used by large companies and SMBs, Time Doctor offers several time tracking features, productivity reports, and payroll features to generate quick and accurate invoices. If you spend four hours balancing a client’s books, and you’re paid by the hour, you have four billable hours.
In the client’s case, you can also identify what their cost is to you. Some admin-related tasks can be repetitive and can slow down your workflow. It may make sense to outsource a non-billable activity or two by hiring an employee.
How can I track billable hours?
And while there are hundreds of tools that can help you with timekeeping and productivity management, one of the best tools available today is Time Doctor. When your billing cycle ends, you should add all the number of work hours for your clients. You can also track your non-billable time to see how much work the project is not paid for and where your company invests its valuable time. The monthly invoicing schedule is the most common option, especially for small business owners, who pay their invoices at the end of each month. Once you’ve decided the rates for your professional services, you have to determine when you want to issue invoices.
It doesn’t matter which kind of task it is, so long as it’s a service that requires compensation. The most common industries where billable hours are commonly used include law firms, consulting firms, web developers, and creatives. The advantage of using a time tracking tool to record billable hours is that you don’t https://www.bookstime.com/ need to do any calculations once you complete the project. You can generate reports based on the data you want and invoice it directly to your client. Simply put, billable hours refers to any time you spend working on a client’s project. The hours are charged or billed to a client based on an agreed hourly rate.
Employers charge clients at sometimes varying rates for different employees. The data you harvest from tracking billable hours gives you insights into the inner workings of your work processes. In turn, you can devise strategies to improve efficiency and productivity for you and your teams to ensure success. Non-billable activities can take up much of your time, leaving you little time to do work that actually matters. Therefore, consider tracking non-billable hours as well so you can identify and cut down the time you’re wasting.
- For example, you might have a contract that stipulates you will pay someone $1,500 per month for 10 hours of work per week.
- That way, you’ll gain sufficient time to focus on the core issues that will help develop your business.
- You can do some research to ensure your expected income is in the range of what others in your field are earning.
- I love how Clockify allows my contractors to independently log billable hours.
- This way, you can keep track of every chargeable hour and generate invoices in an instant.
- You can do that manually, by setting up a spreadsheet with separate columns for the client name, a description of the work performed, the date and the time spent working on the project.