Ilaria Bonini

Digital Marketing Specialist at Timeneye. She is passionate about Italian Cinema (especially Fellini and Antonioni) but during the day she settles for easier content, such puppy videos on Instagram. Of course she does not watch them while writing about productivity!

Billable VS Non-Billable hours: how to stay profitable knowing how to calculate and time tracking them

October 10, 2022

Many professionals working on hourly assignments know how complicated it is to properly track their billable work

And while they work for their clients, they also perform several activities that don’t add up to the customer’s invoice. Despite this, these billable hours vs actual hours worked cost the worker time and money

It is very common to struggle to properly track and balance non-billable and billable time, even if you are law firms, a medium, or a big company with solid experience and expertise. 

This article will show how to calculate the billable work you have done, differentiating it from the non-billable time. To do that we will ask for a little bit of help from technology and our time tracking software, Timeneye.  

Billable VS Non- Billable Hours: what are the differences and how to calculate them

To strike a balance and reach profitability, companies must be very careful about how they calculate the total hours worked and classify them as billable or non-billable time

This is a key point for not just companies or law firms but also freelancers and solopreneurs; they all share the same problem and struggle to find the right billable hours calculator or time tracking software

But first, what do billable and non-billable hours mean when we consider all of the hours worked during a day? How can we divide billable hours vs actual hours spent on working, gaining capabilities and knowledge to better hand in that project? 

Hours worked – When you should and should not consider as billable your work time has mentioned all those activities that are usually considered as billable and the others that should not be included on the bill to your client

Billable Hours Non-Billable Hours Studying/making research for the project Time spent on meetings, calls, and emails with the clients before having signed the contract Market research for the project Pitch to the client, even though it regarded the project you later have done for him/her Project planning and timelines Workshops, webinars and courses to gain new professional skills Meeting (both in person and online) What’s behind the goals and tasks of the project that the contract does not include Writing and replying to emails Networking meetings Doing the actual work for the project Rework, mistakes, or new versions of the project required by personal mistakes or change of direction Checking the work and making reworks or adjustments after the client’s feedback Time spent on collecting receipts, calculating the time spent/ accountant consultancy regarding the invoice to the client 

How to Track Billable and Non-Billable Hours

The first tip that we would like to share with you is to keep track of the hours worked every single time. Do not do that at the end of the project because as long as time goes, by the more you will lose track of how much time you spent on billable or non-billable activities. 
Also, we would like to suggest you make a time log or a timesheet to later bill your clients
For the small project, it is possible to do that manually, creating spreadsheets with single different columns for each activity you are working on; this also adds activities’ descriptions, the date, and the amount of time you spent on them. 

In Timeneye we would recommend you rely on a time tracking software able to easily track all your activities (emails, meetings, actual work performed on the project) with just a single click. 

Thanks to Timeneye’s help, let us see how you can track time, distinguish billable and non-billable activities, and get the data you need to evaluate how you have been handling your projects. 

Set your personal billable hours calculator with Timeneye

When you calculate profitability, you cannot rely on guesstimates. 

Also, spreadsheets become unmanageable if you start working with lots of data

To keep track of the billable hours vs actual hours worked, a digital time tracker provides you with more accurate data

Timeneye lets you create billable projects and set hourly rates for the whole project (if you work solo) or for each employee (for companies). 

Timeneye dashboard

You don’t have to make difficult calculations every time because the platform will show the totals to you. 

After you’ve started tracking your billable time, make sure to keep track of how much you have already invoiced your client, and how much is left. This is crucial for creating accurate invoices, to avoid overcharging or undercharging the client. 

In Timeneye, you can mark every time minute as billable (still to be included in the invoice) and billed (that you have already charged). 

Tracking non-billable work shines a light on the activities of your business. This piece of information is what you should know to improve productivity and, most importantly, keep an eye on profitability

Within a billable project, for example, there can also be some activities that you cannot bill the client and include in the invoice. But those activities must end up in your timesheet otherwise you’ll never know about them. 

Create detailed time reports

The great thing about using time tracking software is that the data is available for reporting and evaluation

You can export all the time you track, take a look at how the time was used and identify cost sinks. 

In this way, you will make a habit of running reports on the billable and non-billable activities of your business. 

This serves several purposes: 

  1. Transparency with the client: you can export a detailed timesheet of the activities you carried out for the client and attach it to the invoice; 
  1. Internal evaluation and analysis
  1. Transparency within the business

Analyze, adjust, repeat: get insights from your work time

Time tracking data is not just a mere calculation of how many hours you have worked, they also give you insights into where, how, and why you spend your time into that particular manner. 

It’s not enough to run reports to count the amounts you have to invoice. You also have to ask yourself if you’re using that time in the best way possible

Let’s say you invoice a project for a certain $$$ amount. Then, you look at the time tracking data, and you find out that or that project/client you have spent an enormous amount of time just in taking care of emails. 

That time is difficult to bill your client, but these hours have already gone and you cannot take them back; they have a cost on your business! 

Having learned from that lesson means that you can take action for future projects to make sure you communicate better with the clients you have. Perhaps you can invest in a communication tool. Or, you can simply set better communication rules with your client to avoid drowning in the endless sea of email. 

Or, let’s say you offer a free marketing analysis of your client’s business included in your client’s contact. You don’t charge the client for it.  

This may seem a good idea to attract new customers in the short term, but if you find out that that analysis took you more time and cost you more than other phases of the project, you may want to reconsider your offer

Calculate your profitability and your hourly rates

If you know the hourly costs of your business, you can for sure estimate your hourly rates; this means you can calculate your profitability. 

You should always keep track of this calculation by comparing how much money you have earned to the costs that the project has required you; this is to avoid your precious time and money going down the drain. 

Timeneye is not just a brilliant time tracking software but it also makes this calculation automatically so you don’t have to lose time filling spreadsheets over and over again. 

Working on Vacation; a necessity or do we lack Time Management Skills?

August 12, 2022

Summer vacation is the best time of the year to recharge the batteries and have some time off. But are we able to shut the laptop off and enjoy the holidays without work as an intrusion or time-wasting activities that interfere with our time with family and friends?

For Americans seems to be normal to work on vacation but is it really necessary or do we need Time Management skills to prioritize our activities?

August has come and with it the time to take some time off and enjoy the sunny days of summer. 

Whatever you are planning to do I bet you are starting the countdown.

Despite the common desire to go on vacation, it is very difficult for the majority of the workers to take some time off and shut the laptop down for real.

An urgent email arrives, your boss calls you to ask you about that client of yours, and so on. Nowadays we speak and try to create a work-life-balance way of working and living, as we already anticipated in last year’s article, What will work look like in 2021?. Despite working-life-balance having become a common topic, the working society where we live seems to keep struggling with a toxic working culture where being productive and always available are the normality.  

Working on vacation has become normal; let us take a look at the data 

A survey from MyPerfectResume asked 1000+ U.S. workers how they handle their time off from work and how they separate work from personal life during vacation. And relaxing seems to be more difficult than working instead! 

MyPerfectResume found out that 82% of the American workforce work while on vacation. But let’s see what this means and how U.S citizens contemplate work while on vacation: 

  • Nearly 90% check work messages and emails while on vacation; 
  • 70% of respondents answer calls from clients or colleagues on vacation; 
  • 42% take vacation days specifically to do work
  • 37% work on vacation because they “just like to be on top of things”; 
  • 66% reported that their boss contacted them to do work while on vacation and 94% did the work

What also comes out is that working on holidays is not just a random action but it seems true to be a habit. As shown in the following infographic, 42% of the respondents have already worked on holidays 2-3 times, and 12% even 10 times

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Working on holidays; when do we need some Time Management skills and be able to prioritize tasks

As discussed in our article Time Management: project priorities and how to track them, we always feel busy because, as Eisenhower said, we are not able to prioritize our activities and we often spend too much effort on time-wasting tasks and activities. 

Especially on holidays, we need to understand what activities need our time and energy so, for example, we need to ponder if that email is urgent or if it can wait a few days.

Time Management tools come to our help since they help us prioritize tasks of each project we are working on; they track our projects’ time to avoid any time-wasting activity and they provide us the data to weigh what project/client is the most fruitful

Does Technology make us overwork or does it make our work easier and also develops some Time Management skills?

Technology is often misunderstood because it is usually seen as a non-stop working tool that never gives us a break. 

A study taken by Project Time Off noticed that those workers who work remotely tend to check their devices and stay connected way more than not remote workers do. Also, 78% of respondents said that they feel better knowing that they can use the internet and access work from their holiday resort rather than not having the possibility to access it at all. Blaming technology is not an answer and blaming a toxic working culture might just be a simplistic way to explain this phenomenon.  

What we, in Timeneye, have been noticing is that usually companies do not want their employees to overwork but, in some cases, it seems to be necessary. Indeed, the MyPerfectResume study testifies that 77% of respondents affirmed that they would feel guilty if they had to disturb someone’s vacation regarding a work issue. The conclusion is that working during holidays is something that neither the managers nor their employees want; it is just something that seems necessary

Timeneye is a Time Manager software that aims to make you avoid wasting time and lets you have the time off that you deserve

Timeneye provides you with simple and intelligent time tracking tool able to register hours, monitor project progressions and improve productivity

With Timeneye you can create the project you are working on, and set the activities and phases that it will require.  

After having done that, Timeneye makes you able to assign the proper time to the project or the activity you are focusing on. You can always use a calendar and create daily different tasks. In case the calendar is synced in Timeneye, all you need to do is to look for it in the Timeneye dashboard and just set it up! Using a calendar is also useful for time block charts and assigning different tasks to your team members

Timeneye also provides you a  time audit that will show you how you have allocated your time across your projects, letting you also know what project, task or client has been taking you most of your time.  

Automatically saving data on the software each time you track your time, Timeneye always provides you fresh data from which you can take insights about your project life cycle and how you have been allocating time and resources to it. 

Timeneye is the software you need to be more efficient while working on numerous, complex projects and splitting different activities between the members of your team. 

Time is irreplaceable and it is the most valuable thing we have, for this reason Timeneye aims to help you to better manage it and make you spend the best holidays you can without worrying about work

What are you waiting for? Sign up for a free 30-day Timeneye trial!  

Your time is priceless, take better care of it

Start managing your time in Timeneye with a 30-day trial.

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