Why you should track non-billable hours

Written on January 26, 2018

If you only track billable hours, you’re only tracking half your work. While timesheets and time clocks are important for recording immediate profit, tracking non-billable hours helps companies become more efficient, more economic and better employers in the long-term.

What are non-billable hours?

Non-billable hours represent everything you do at work that can’t be billed for or reimbursed by a client. They’re an essential business expense reserved for:

  • New business pitches
  • Proposal writing
  • Company meetings
  • Employee development
  • In-house training
  • Networking
  • Entertaining clients
  • Client research
  • Internal processes
  • Invoicing, bookkeeping and essential admin

The importance of non-billable hours

Non-billable time is hugely important, and 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 unbillable tasks that your team spends the most time on, you are better placed to minimise 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 interrupts your team’s productive work.

Protect time for development

How much time does your company spend researching and improving its knowledge? Do your employees actually have enough time to develop their skills? Do you dedicate time each month to attract new business? 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, knowledge sharing and pitching to potential new clients.

Identify unprofitable clients

Tracking non-billable 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 reconsidering your future 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.

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.

Track your hours

Automatic time trackers like Timely track all your non-billable hours for you, so you don’t spend any more time on essential admin. Try automatic time tracking free for 14 days and see where you can get more from your time.

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