What is a good billable utilization?
Asked by: Sunny Kilback | Last update: December 19, 2025Score: 4.7/5 (49 votes)
That's why it's important to aim for the sweet spot where billable utilization is neither too high nor too low and balances profitability, employee needs, and work quality equally. For most companies, an ideal utilization rate would be between 70% and 80%.
What is a good billable utilization rate?
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.
What is the KPI for billable utilization?
The utilization rate formula is defined as: Billable Utilization % = (Number of Billable Hours / Number of Available Hours) X 100%. It's one of the most important Key Performance Indicators (KPIs) measured by almost all professional services firms.
What is an acceptable utilization rate?
The ideal utilization rate varies, but most aim for 75%. Calculating average and optimal utilization rates can influence the billing rates required to meet profit margin goals. It is best to calculate employees utilization rates using accurate data. You can achieve this by carefully tracking employee time.
What is a good capacity utilization?
Typically, a capacity utilization rate between 85% and 100% is acceptable for most economic and corporate operations. The example rate of 44% shows that the company is operating significantly below full capacity by underutilizing its resources, inefficiently allocating resources or needing to improve productivity .
Professional Services: The Importance of Utilization Rates and Billable Hours
Is 3% utilization good?
A general rule of thumb is to keep your credit utilization ratio below 30%. And if you really want to be an overachiever, aim for 10%. According to Experian, people who keep their credit utilization under 10% for each of their cards also tend to have exceptional credit scores (a FICO® Score☉ of 800 or higher).
What is a healthy utilization rate?
For most companies, an ideal utilization rate would be between 70% and 80%. However, individuals in leadership positions typically spend less time on billable client work (between 30% and 70%) as they are focused on high-impact strategic work that grows the business.
What is the normal capacity utilization?
A rate of 85% is considered the optimal rate for most companies. The capacity utilization rate is used by companies that manufacture physical products and not services because it is easier to quantify goods than services.
What is the standard utilization ratio?
The Standardized Utilization Ratio (SUR) is the primary summary measure used by the National Healthcare Safety Network (NHSN) to compare device utilization at the national, state, or facility level by tracking central line, urinary catheter, and ventilator use.
How to calculate billable utilisation?
Billable utilization is calculated by dividing the number of billable hours by the total number of available hours (typically with allocated holiday time not included), and then multiplying by 100.
What is a benchmark for utilization rate?
Utilization benchmarks
A high resource utilization rate (above 90%) indicates that employees are actively engaged in productive work, whether billable or not. This can be a positive sign of a busy and efficient team. However, consistently exceeding 95% might lead to burnout and reduced work quality.
What is effective billable rate?
The effective bill rate is calculated by dividing the total revenue generated from a project by the total number of hours worked on it. The total number of hours worked should include both the billable and non-billable hours.
What is the 30% utilization rule?
To maintain a healthy credit score, it's important to keep your credit utilization rate (CUR) low. The general rule of thumb has been that you don't want your CUR to exceed 30%, but increasingly financial experts are recommending that you don't want to go above 10% if you really want an excellent credit score.
What do you write in billable utilization in appraisal?
Billable utilization is the percentage of time your team or individual employees spend on work that directly generates revenue and can be billed to clients. For example, direct project tasks like writing, coding, and designing are considered billable hours.
What is effective utilization rate?
Utilization rate is the percentage of an employee's total amount of working hours that actually contribute to the work that is eventually billed to a customer. The utilization rate is most commonly used in professional services, but can be used by other organizations to assess their team's current productivity.
What is the industry standard for capacity utilization?
Despite the increase, aggregate capacity utilization for industrial producers remained below the long-run average of 79.7%. Capacity utilization in the US fell to 76.8% in November 2024, the lowest reading since April 2021, from a downwardly revised 77% in October and below forecasts of 77.3%.
What is ideal utilization factor?
Utilization Rate in Different Industries Benchmark
Here's what a good utilization rate looks like in different industries that tend to measure this KPI for their employees: Professional services: around 70-75% (depending on the specialization) Production & manufacturing: 80-90% IT services: 75%
What is the average utilization?
How to measure the average utilization rate of your office spaces. To calculate the average office space utilization, divide the total number of employees using the space by the office's capacity and then average this value over the specified time frame.
Is a 900 credit score possible?
While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
What does 80% utilization mean?
The 80% represents an enterprise's optimal utilization to meet its target profit margin, which would then be compared to its capacity utilization to determine if any operational improvements are necessary.
What is average utilization ratio?
Your credit utilization ratio is one tool that lenders use to evaluate how well you're managing your existing debts. Lenders typically prefer that you use no more than 30% of the total revolving credit available to you.
What is the attorney utilization rate?
It's the ratio of billable hours to the total hours worked by attorneys. This rate is pivotal in assessing the efficiency and productivity of a law firm. A high utilization rate indicates that a significant portion of a lawyer's time is spent on billable work, contributing directly to the firm's revenue.
What is the standard utilization rate?
Standardized Utilization Ratios (SURs) are used to compare the number of observed device days (the numerator) to the number of predicted device days (the denominator).
How bad is high utilization?
Conversely, a high credit utilization might mean you're closer to maxing out your credit cards and can often result in a lower credit score. Understanding how credit utilization works, the impacts to your credit score and how to calculate your credit utilization ratio is an important part of managing your credit.