billables

Billables refers to the portion of work performed by an employee or contractor that can be billed to a client. In professional services firms, billable hours are typically the time spent on client engagements that is recoverable through invoices. Non-billable time includes activities such as internal meetings, administrative tasks, training, or business development that cannot be billed to a client.

Billable hours are tracked using timekeeping systems and linked to specific client projects or matters. Rates are commonly set by role, seniority, and market, and may vary by engagement; invoices reflect the applicable bill rates times the number of billable hours, possibly plus expenses or disbursements.

Key metrics include utilization, often defined as billable hours divided by total hours worked; chargeability, similar to utilization; and realization, the percentage of billed amounts actually collected. Firms also monitor non-billable targets to ensure balanced workloads and professional development.

Practices and challenges: meeting billable targets is a common performance measure in many firms. Poor timekeeping, misclassification, or excessive discounting can reduce realized revenue. Travel time may be billable or not depending on policy; clear client agreements and transparent invoicing help reduce disputes.

Billing formats vary; hourly billing is common, but retainers or fixed-fee arrangements can apply. The term billables emphasizes revenue-generating work; overall profitability depends on the mix of billable hours, rates, and the efficiency of delivering services.