For most agencies, consultants, freelancers and other contractors, balancing billable and unbilled time is a constant challenge. It is safe to assume that companies and teams will want to bill as much as possible. However, one of the best ways to attract new clients and earn more billable hours is to do more non-billable tasks such as recruiting, marketing, branding, etc. What are billable hours?
Most tasks that are directly related to a client’s project are billable. Although the definition of a client-related task can vary from one business to another, this article will focus on a billable hours definition that covers all bases in creative projects. How does billable hours work?
Total billable hours is the total time spent on business projects and can be charged to clients according to an agreed-upon hourly fee. Many businesses, entrepreneurs, freelancers, and agencies use billable hours to charge their clients for their services. Workers must track their time every day to ensure they are correct to charge for the billable hours. Non-billable vs. billable hours
Here’s a list that will help you understand the most important work obligations your business might consider billing for: Performing actual work towards completing the project. It’s that easy.
Analysis and research
Planning a project
Developing project timelines
Meetings
Responding to emails from work and other communication views.
Revisions to work submitted to client
Cheat Sheet for Business Profitability
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These proposals can be presented to clients
Meetings that are held before signing a contract
Training courses
Networking events
Events for team building and social interaction
Fixing your avoidable errors
Work that is not within the scope of the project as described in your contract
Invoicing, payment processing, reports creation, and other administrative tasks
How to track billable hours
1. SET YOUR HOURLY RATES You can, for example, set a target income for the year. Do some research to ensure your target income is in line with the earnings of similar businesses. Once you have the desired figure, divide it by the number working hours per year, approximately 2,080 hours for a 40 hour workweek. You may want to increase your hourly rate to compensate for the time spent on non-billable tasks. 2. DETERMINE A INVOICING SCHEDULEO Once you have established your hourly rate, choose the most suitable invoicing schedule and follow it. A monthly billing cycle is the most popular among freelancers, small businesses, and agencies. Invoices are sent out on the last day of each month. Once you have established your invoicing schedule, it will be possible to adjust your time records to match your billing cycle. Next, CREATE A TIME LIST