Getting the Numbers Right

Stop Giving Away Your Time
(Guidelines on how to close the billing efficiency gap)

How much are you giving away to clients because of the omissions and "guesstimates" of time spent on the project? Do you question what can be charged back to the client, write off an hour spent on a project because you like your client or don't want to be seen as a penny pincher? Would you like to stop "subsidizing" clients at a personal expense to your quality of life? This month we discuss what classifies as billable and non-billable and how you can bill for more of your time.

Increasing your billing efficiency by even a marginal amount can have a substantial impact on your bottom line. Example: Let's say your firm's current billing efficiency is at 65% (24 hours out of a 40 hour work week). Capturing and billing an additional 20 minutes/day equals an increase in billable efficiency of only 1.25% - the effect on the bottom line however is an increase of over $12,000/year per employee!

% Billable Billable Hrs/Week Rate $ / Week $ / Year
65.00% 24.0 $100.00 $2,400.00 $120,000.00
66.25% 26.5 $100.00 $2,650.00 $132,500.00

What would increasing billable efficiency by one percent mean to your bottom line?

(1) Systems, Utilization, and subsidizing clients: Part 1: Measuring. 1. by David Baker of ReCourses
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