By monitoring even non-billable time, managers can understand which tasks can be reallocated to employees with a lower cost to the company or even outsourced. Often highly skilled resources are allocated low-effort, non-billable tasks due to a lack of visibility into time. Of course, the labor costs will be affected by the time spent on the work by the resources, making time tracking essential.Īpart from these, there is a common issue plaguing most services firms. Time & Materials: These contracts cover the cost of materials and overheads, in addition to labor costs.Daily/Hourly Rate: As its name suggests, time must be tracked when using this model for billing the client accurately.Fixed Price: While the costs are fixed, the organization still needs to track time to ensure that the work is being completed within given time parameters to stay within the costs specified.Take, for instance, the following billing models: Knowing where every minute is being spent allows organizations to make correct decisions to increase billable hours, no matter which billing models are used. Not Tracking All Timeįor PSOs, tracking time should be as important as tracking money. Without this information, it becomes difficult for them to reach their billable potential and maximize utilization rates. Employees need to have an accurate understanding of how they are spending their time and how much of that time spent can be billed. However, to do so effectively, these employees need to know their billable potential. You need highly skilled employees who can generate revenue to offset their costs. Simply having good employees is not enough.
CONSULTING BILLIABLE HOURS SPREADSHEET PROFESSIONAL
In the professional services industry, employees can make or break a company. If this is a regular issue, it can prove to be a massive liability for the bottom line of the company. Some employees may even forget to account for all time spent on different tasks. If filling up timesheets is complex or if they record hours later, there is a risk of errors. Employees must be empowered to record time spent in real time. As a result, timesheets will not reflect the correct time spent on tasks and projects, resulting in reduced billable hours. Unless you have a time tracking system, such as Replicon, that is both efficient and easy to use, errors are bound to happen. This is time that they could have spent on billable work instead. Employees may even need to shift through multiple files and documents to determine the time spent on different tasks. Considering the tedious nature of this task, it is not uncommon for employees to fill up timesheets at the last minute, resulting in quite a few hidden costs and potential errors. This is particularly true if the timesheet population is performed manually. Spending Too Much Time on Admin Tasksįilling up and submitting timesheets is an unavoidable administrative task, but it also happens to be tedious and time-intensive. Here are some of the common challenges around billable hours that all professional services firms experience. While some billable hours must be sacrificed for essential business functions, such as admin work, planning, R&D, etc., there are some other pitfalls to be aware of. Faulty timekeeping and project overruns also reduce overall billable hours. However, PSOs end up wasting those billable hours on non-billable work, such as administrative tasks. To improve utilization rates, organizations must focus on capturing all billable hours. Improving utilization rates directly impacts the bottom line. Mobile Professional Services AutomationĮBOOK Digitize at Scale and Speed for Modern Workforceĭownload Ebook Now Top Billable Hours Mistakesīillable hours are used to calculate utilization rates, which are an excellent indicator of productivity and revenue.
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