For a unit that is so fundamental to profitability, billable hours continue to be poorly documented across the professional services sector. Law firms, IT consultancies, accountancy firms and agencies the world over – who ply their trade on a position of credibility and reliability – continue to use error-prone manual systems to record billable work.
This inaccuracy has in turn created immense time leakage – US companies alone lose $50,000 per employee each year in lost billables. One study examining the company time tracking practices, found that even when logged daily, manual timesheets were only ever 67% accurate.
Thankfully, there are smarter alternatives to Excel spreadsheets, paper timesheets and stop/start timers out there. Automation offers professional services companies the ability to refine and streamline billable reporting – improving the accuracy of internal reporting and invoicing, while dramatically reducing overhead spent on billable hours admin.
In this article, we’ll demonstrate how you can track billable hours automatically using Timely – an AI-powered software that can capture work activity automatically for professionals in the background while they work. We’ll explore the specific features you can use to review individual and team billable hours in real time, as well as visualize billable percentage and understand where you are against your daily capacity.
It goes without saying that if your company charges clients by the hour, you can’t bill fairly or transparently without accurate billable hours data. Yet even firms that don’t charge an hourly rate still use billable hours models internally to forecast revenue, refine fixed rates and understand where their teams are spending time.
Billable hours inform a ton of different key performance indicators – like utilization rates, billable targets, realization rates. While professional service companies may differ in how they approach them, an accurate, up-to-date account of billable hours is still critical for understanding baseline profitability and productivity.
Tracking billable hours accurately is, of course, valuable for employees too – particularly junior lawyers anxious about spending enough time on client matters. Keeping a close eye on your billable percentage and being able to account for all billable and non-billable work is critical for preparing for performance reviews.
Automatic time tracking software is revolutionizing how professional service companies account, report and bill for their work. By tracking billable hours automatically, professionals can produce an objective record of all billable and non-billable activity, while outsourcing repetitive, time-consuming firm admin. Here’s how it works in Timely:
1. Set billable rates for a project
Set an hourly billable rate for each project or case you’re working on. You can choose to set a blanket billable rate for everyone working on the project, or apply individual billable rates to reflect different pay grades and contracts within your team.
2. Turn on automatic time tracking
Timely can capture the time you spend on every piece of work automatically in the background for you, from time in meetings and documents, to emails, websites and even GPS locations. Everything is recorded to a private timeline that only you can access. No timers, no notes – focus 100% on your work without thinking about tracking your time.
3. Drag captured activities to your timesheet
Drag automatically captured work activities to your public timesheet to log them. Choose the appropriate billable project and Timely will calculate the billable hours you’ve put in for you. Better yet, get Timely’s AI to draft these project time entries for you! By reducing timesheet admin to a simple review process, Timely has helped users reduce weekly timesheet overhead from 2 hours to 10 minutes.
Timely provides a real-time total of your billable hours as you log activities to projects. Switch between day, week or month totals to get the bigger picture of your recent performance.
Providing you have the access rights, click any team member in your Timely workspace to quickly view their billable hours. From the Dashboard view, you’ll find a snapshot of their billable and non-billable hours, capacity and billable percentage for any time frame.
From the People page, you can find a weekly overview of all billable hours logged across the company against total company capacity.
Timely’s handy capacity visual helps you quickly scan billable percentage across your team, with dark blue indicating billable hours, light blue indicating non-billable hours and red indicating all time logged beyond an employee’s capacity.