How do you handle billable hours?

Asked by: Prof. Alva Rau PhD  |  Last update: August 13, 2023
Score: 4.1/5 (54 votes)

How to Track Billable Hours
  1. Set Your Hourly Rate. ...
  2. Determine an Invoicing Schedule. ...
  3. Create a Time Log. ...
  4. Track Your Billable Hours by Project. ...
  5. Calculate Your Total Billable Hours. ...
  6. Create a Detailed Invoice.

How do you deal with billable hours?

How to increase billable hours – billable hours best practices
  1. Bunch queries together. ...
  2. Remove distractions and tackle procrastination. ...
  3. Track billable hours in real-time. ...
  4. Delegate non-billable tasks. ...
  5. Track non-billable hours. ...
  6. Track all the billable hours. ...
  7. Completing billing descriptions.

How do you explain billable hours?

Billable hours are the amounts of an employee's work time that can be charged to a client. Employers charge clients at sometimes varying rates for different employees.

How do I keep track of billing hours?

How to Track Billable Time?
  1. Step 1: Agree with an Invoicing Schedule. ...
  2. Step 2: Use an Online Time Tracker. ...
  3. Step 3: Use Real-time Tracking. ...
  4. Step 4: Track Subtasks and Multiple Projects for Each Client. ...
  5. Step 5: Don't Forget Non-billable Hours. ...
  6. Step 6: Compile a List of Billable Tasks. ...
  7. Step 7: Create an Invoice.

How many hours a week is 2000 billable hours?

For example, if you want to reach a goal of 2,000 hours annually, you would need to bill for roughly 40 hours each week, or eight billable hours a day.

How to Bill Hours as a Law Firm Associate

26 related questions found

How many billable hours are normal for a week?

But the reality is you're probably not billing a full 8 hours per day. We surveyed 100 companies and found that most service-based companies that bill hourly require employees to bill at least 31 hours per week. 52 weeks x 31 hours = 1612 required billable hours by most companies in one year.

How many billable hours is 1800?

If the goal is to work 1800 billable hours each year, that translates into 2420 total working hours, without taking any sick or personal days or accounting for the commute, with a 10 hours workday.

What is an example of a billable hour?

Billable hours are quite simple; these are the ones you charge your clients for work directly done on their projects; for example, the hours of a developer working on a new webpage, administrative work, or other project activities.

Do I get paid for non-billable hours?

Instead of thinking of non-billable hours as time you can't get paid for, you should think of it as an investment in your organization's future. You won't get paid directly for it, but the non-billable effort you put in now will help you increase profits and grow your business over time.

How do consultants track billable hours?

Then, calculate billable hours by multiplying the total hours by your hourly rate to calculate the billable hours for each task. For example, if you charged $50 per hour and worked on a task for 2 hours, the billable hours would be $100.

Do meetings count as billable hours?

When working for a client, any tasks you complete on their behalf count toward your billable hours. These tasks will vary by industry or profession but may include: Attending project-related meetings. Completing and reviewing work for the client.

Do you include breaks in billable hours?

Non-billable hours also include activities that employees do for their own benefit, for example, taking a 5-minute break to freshen up, or eating. These activities are not directly related to work tasks but contribute to the employee's total hours.

What are some non-billable tasks?

Non-billable hours are the work hours you spend which are not going to be directly charged to the client. Some examples of non-billable work hours are things such as team meetings, staff development/training, or networking and attending conferences.

What are the disadvantages of billable hours?

Knowing the client is going to be monitoring those hours and each hourly achievement might cause some people to feel added pressure, work faster, and make mistakes. Hourly billing may also make it harder to present your client with the most accurate estimate for the completion of the work.

Do you round billable hours?

Businesses that use billable hours charts are likely to round their billable time much more reasonably. For example, without a billable hours chart, professionals might round a seven-minute meeting up to 15 minutes.

Why are billable hours bad?

It forces us to make too many time- value judgments that too often are based purely on whether an activity is billable. It forces people away from real life and into a world where everything is billable (important), or not (not important). If it's not billable, it better be very important.

How do I bill a company for my time?

Here are some tips to appear professional when you're invoicing a company as an individual:
  1. Include a professional header. ...
  2. Use a professional template. ...
  3. Bill according to the contract. ...
  4. Know who to invoice. ...
  5. Send invoices according to the company's billing cycle. ...
  6. Follow up.

What is the difference between billable hours and regular hours?

Billable hours represent the amount of time employees have spent on tasks that are invoiced to clients. Non-billable hours are the hours spent on tasks that don't get invoiced. They are most often dedicated to different internal tasks.

How do you bill clients hourly?

Here's a checklist of the information that you should include in an hourly invoice:
  1. Label as an invoice.
  2. Your name and contact information.
  3. Invoice number.
  4. Date of the invoice.
  5. Billing period.
  6. Client name and address.
  7. A breakdown of services rendered.
  8. Hourly rates.

What is the industry standard for billable hours?

Time is money—especially when it comes to how many billable hours in a year an attorney can accumulate. Thankfully, using a billable hours chart can help. Lawyers work hard, and they work a lot. Many firms expect attorneys to reach minimum billable hour requirements ranging between 1,700 and 2,300 hours per year.

What is the basic formula for calculating billable hours?

Now that you have set your rate, it's time to learn how to calculate billable hours: you gather your billable hours to be invoiced to a specific client and multiply them by your hourly billing rate. This sounds pretty easy, but only if you have one client with one project.

How many hours do most lawyers bill?

The average billable hours for an attorney is 1,900 hours per year. This means that if you work 40 hour weeks, you'll be able to complete 2,080 billable hours in a year before taxes. If you work 50 hour weeks, then you'll be able to complete 3,000 billable hours annually before taxes.

What percentage of your hours should be billable?

On the other hand, if your billable utilization target is too low, you may not be producing enough billable work to meet your profit margins. Experts say ideal utilization rate for billable hours should be around 70-80%. This is where the company reaches the highest possible profit with an optimal hourly charge.

How many hours should I bill a day?

As a general rule, if you bill between 36 and 40 hours in a week, you're likely going to be okay. Over the long run, the expectation is that you should be averaging 40 billable hours a week - assuming you have productive work to do.

What are billable hours in timesheet?

A billing timesheet (also known as a time card) is a document used to record daily work hours. Some of the information usually contained in a billing timesheet include: When the workday commences and ends. Hourly rate for each task.