If you only track billable time, you’re only tracking part your work. While timesheets and time clocks are important for recording immediate revenue, tracking non-billable hours helps teams become more efficient, effective and profitable. With holistic oversight of all your team's activity, you also keep all your efforts visible and accountable, which is especially useful for smaller teams with limited resources. Here's why everyone looking to get more value from their time should track non-billable hours.
What are non-billable hours?
Non-billable hours represent everything you do at work that can’t be billed or expensed to a client. They can be costs swallowed by your business that enable it to function and continue, as well as project-specific expenses. Common examples of non-billable time include:
- Bids, proposals and pitches for new business
- All-hands company meetings
- Staff development and training
- Networking and conference appearances
- Entertaining clients
- Business development, strategy and research
- Operational admin (time tracking, invoicing, expensing, bookkeeping, managing company finances)
The importance of tracking non-billable hours
The importance of tracking non-billable time can't be understated; your business probably wouldn’t run smoothly or ever develop without it. Understanding where your non-billable time goes can help you:
Remove expensive inefficiencies
Admin is a necessary evil of running a company, but it doesn’t have to be a drain on resources. By identifying the non-billable tasks that your team spends the most time on, you are better placed to manage them. From using automating timesheet creation and trying out new communication tools, to streamlining lengthy processes and cutting down on redundant meetings, identify and fix the problems that interrupt your team’s productive work. This is one of the most effective ways to improve your team's utilization.
Improve profitability
Tracking non-billable time spent on specific projects can reveal how much your clients actually cost you. We’re talking about the sum of meetings, emails, conference calls and additional contact that you can’t always bill for. By identifying who makes your team spend more non-billable hours, you can proactively address the problem —whether that’s adjusting pricing for future projects, introducing new communication processes or addressing ways of working with a client.
Find more billable hours
Annoyingly, not everything you work on falls within your core hours. By tracking time spent outside of the office, you may discover you are actually missing out on some hidden billable hours. From business calls you received in the taxi, to late-night work requests and travel for clients, tracking non-billable time ensures you get the complete picture of everything you work on. One study from Affinity Live revealed that US firms could be losing approximately $50,000 each year due to hidden billable time spent on client email.
Protect time for development
How much time does your company spend on R&D? Do your employees actually have enough time to develop their skills or feel they have permission to follow industry news on company time? Do you actively protect space to attract new business and reflect on completed projects? Tracking non-billable hours shows you exactly how long your company devotes to employee development and business growth. You may find you need to rework internal processes to ensure you’re protecting enough time for learning, experimentation, consolidation, strategy, operational improvement and knowledge sharing.
Get more quality from time
Tracking time can give you a stronger sense of time’s actual worth and makes you accountable for how you spend it. Tracking non-billable time reveals that it’s just as valuable as the time you spend on billable work. By understanding how you use time more generally, you discover where you misuse it and where you can get more quality from it—including how much you switch context in a day or spend time on low-value "shallow" work.
How to track non-billable hours accurately
Automation offers an ideal solution to the error and inefficiency of manual time tracking. Automatic hours trackers like Timely track all your hours for you, so you don’t spend any more time on essential admin. It records all the time you spend in every work app, website, email, meeting and GPS location in the background as you work, creating a flawless record of all your hours.
Individual team members just need to drag and drop these activities to log them to their public timesheet. Tags let people get granular about project activity type, although AI can also draft these entries for your team.
All this information is then fed into real-time dashboards and reports to keep on-top of where your non-billable efforts are going. You can even break down utilization rate by team member.
It's the easiest way to ensure all your work is accounted for. By removing dependence on manual input, you get a fully accurate record of all of your business time. No timers, no spreadsheets, no guess work.
