Tracking non-billable time can be just as valuable as the billable hours. Well, maybe not quite as valuable, since you're charing customers for the billable hours, and that's probably how you make a living. But still, there are some big reasons to track non-billable hours.

The biggest reason to track non-billable hours: To find the percentage of non-billable time from your total.

Knowing the percentage of non-billable time means you can improve. Cut it down, reduce it, become more efficient. And hopefully use some of that time for billable hours instead of just hiring new people. Start by finding out what consultants are spending their time on. Try to remove or reduce those admin tasks to a minimum. Without all the overhead, people don't feel as overworked, and can (hopefully) apply themselves to billable tasks.

Big reason number 2: To improve your internal processes

You might find that investing a little in tools can reduce the human resource load for admin.

Big reason number 3: To learn what your effective billing rate is.

Divide your total revenue by your total hours to find your effective billing rate. For example, you may be billing $1,000 per hour, but not billing enough hours to make $3 per working hour. Of course that's an exageration, but if you're only billing a few hours per week and working 60, then your effective billing rate is probably pretty low. Once you know the effective billing rate, you can inch it up to where it should be.

Take a look at how to mark time logs as billable or non-billable.



Coming up on Standard Time® we’re talking freelancing, we’re talking consulting, we’re talking billable and non-billable time right now. Mike with Standard Time back with Ray White of Scoutwest the developers of Standard Time. Ray, as a freelancer I have billable time, I have non-billable time but I want to log all of that. How do I do that in Standard Time?

Ray: You want to make sure all of your time is collected. Whether your billing that to a client or not; whether it shows up on an invoice. You want to make sure that that time is logged. Let’s look at how to do that.

What you’re seeing in the timesheet are time logs, that’s really the place to start. The numbers that you see here represent time logs. If I click on the time log tab you see these represented in a list; it’s a little different than in the timesheet. If you go to the timesheet and click on one of these those are time logs. Go down here and click on notes and detail you will see that each one of these has a billable and a billed check box.

If you’re billing time you would check that and that’s going to end up on an invoice when you bill that client. If you don’t bill the time you can just uncheck that and you’ll know where your time is spent.

I’m going to switch over to the project tasks tab, open up one of these. You’ll notice that each one of those has a billable or non-billable check box. You can basically determine for each task whether it’s billable or not.

You know that those tasks show up in the timesheet if you want to charge time or log time to a non-billable task you simply put it into that. Or billable task will automatically set that flag that we saw earlier when we went to notes and details. Really that’s all you have to do.

Thanks Ray. We’re asking more of your questions next time on Standard Time. If you have a question that you want to submit and we’ll record a response you can do so by going to the website by clicking on the link at the end of this video. We’ll see you next time with more Standard Time.


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