Why you should track non-billable hours

Last updated on 
January 26, 2018

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If you only track billable time, you’re only tracking half your work. While time sheets and time clocks are important for recording immediate revenue, tracking non-billable hours helps teams become more efficient and profitable. With complete oversight of your company's activity, you can ensure everyone stays aligned with a healthy workload too. Here's why you should always track your 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’re costs swallowed by your business that enable it to function and continue. Common examples of non-billable time includes:

  • Bids, proposals and pitches for new business
  • All-hands company meetings
  • Staff development and training
  • Networking and conference appearances
  • Entertaining clients
  • Business strategy and research
  • Operational admin (time tracking, invoicing, expensing, bookkeeping, managing company finances)

The importance of non-billable hours

The importance of capturing 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 minimize 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.

How to automate unproductive tasks

📉 Identify unprofitable clients

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 reconsidering your future with a client.

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💵 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? 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.

💜 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.

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 an infallible record of all your hours.

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Using AI, it can then categorize this activity for you, using tags and projects to separate billable and non-billable hours.

Real-time dashboards and reports then help you keep on-top of where your non-billable efforts are going.

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 hassle.

👉 Track all your non-billable hours automatically with Timely

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