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Billable Hours Formula:
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Billable hours represent the portion of total working hours that can be charged to clients. It's calculated by multiplying total hours worked by the billable percentage, which indicates the efficiency of time utilization for revenue-generating activities.
The calculator uses the billable hours formula:
Where:
Explanation: This calculation helps businesses and professionals determine how much of their working time is actually generating income versus time spent on administrative or non-billable tasks.
Details: Tracking billable hours is crucial for service-based businesses, law firms, consulting agencies, and freelancers to measure productivity, set pricing, improve profitability, and make informed business decisions.
Tips: Enter total hours worked and the billable percentage (0-100%). The calculator will determine the actual billable hours. All values must be valid (total hours > 0, percentage between 0-100).
Q1: What is a good billable percentage?
A: Ideal billable percentages vary by industry, but generally 70-85% is considered good for professional services, while 60-70% is typical for law firms.
Q2: What factors affect billable percentage?
A: Administrative tasks, business development, training, meetings, and non-client work all reduce billable percentage.
Q3: How can I improve my billable percentage?
A: Streamline administrative processes, delegate non-essential tasks, use time tracking software, and focus on high-value client work.
Q4: Is 100% billable percentage achievable?
A: No, as every business requires some non-billable time for administration, training, and business development activities.
Q5: How does this differ from utilization rate?
A: Billable hours focus on client-chargeable time, while utilization rate considers all productive work including internal projects.