How Accurately Are You Recording Your Non-Billable Hours?

by Ronik Patel

How Accurately Are You Recording Your Non-Billable Hours?

Albert Einstein famously proved that time is the fourth dimension. But for web developers, there are two kinds of time – two separate dimensions that need to be taken into consideration.

The first dimension of time is billable hours. The second is non-billable hours. Any service-oriented professional, from web developers to lawyers and beyond, need to be able to measure these two types of time and to strike a key balance between them.

If you’re not already tracking the time you spend on your projects using a tool like Hubstaff or Timely, now is the time to start. This will give you the raw data you need to begin optimizing your workday around billable hours, and start finding opportunities to reduce non-billable hours with greater efficiency.

But in order to do that, we need to set some targets. We need to schedule out an entire work year according to a target number of billable hours.

The Categorized Work Week: a Simple Example

Let’s imagine the following scenario:

  • You start work at 8:00 AM and work to 6:00 PM five days per week (50-hour workweek).
  • But you take an hour off for lunch (45 hours).
  • And you can assume you take at least two 15-minute coffee breaks (42.5 hours).
  • You have to spend at least half an hour per day in correspondence, either with your team or with clients and their representatives (40 hours).

As you can see, it’s very easy to lose 20% of your weekly productivity doing things that don’t actively advance your clients’ projects. That means that the time you do spend working on billable tasks needs to accommodate at least that extra 20%.

At this point, I should also point out that the half-hour-per-day spent in correspondence is a very optimistic estimate. Everyone knows managers, supervisors, and executives who will schedule time out of their day just to “catch up on emails” and promptly disappear for the rest of the week.

If you are a web developer that works in an office (i.e. not a work-at-home freelancer) then you also have to factor in your commute to and from work. If we assume you have an hour-long commute to and from work, you end up “working” 60 hours per week yet only being able to account for 40.

That means losing 33% of your weekly productivity. And this doesn’t even take into account eventual personal calls at work, training sessions, meetings with coworkers, pro bono work, writing proposals to clients, or interviewing new hires. Throw all that in there and you’re lucky to end up spending half your workday actually “working” on billable projects.

What Can You Do About Non-Billable Hours?

First thing’s first: You can’t manage what you can’t measure. You need to use a time tracking app to determine just how much time you’re actually spending on work-related tasks and how much of it your clients should actually be paying for.

You’ll quickly find that there two extremes to look out for. On one end, you’ll have clients whose workflows are stymied by indecision and punctuated by non-billable conference calls and meetings. You will have to find a way to adjust your pricing to make the work economically viable and to introduce new communication processes that work in your favor.

On the other end, you’ll have your own workflow inefficiencies to account for. You may be able to improve the amount of value you get out of every hour simply by holding it accountable to a schedule that tells you, in no uncertain terms, just how valuable every hour really is for your business.

In between, you will be able to schedule a time for administrating your company without making administrative processes a time-consuming resource drain. This is where you can implement the biggest changes and have the greatest effect when dealing with overall workplace efficiency.

Automate High-Volume, Low-Impact Processes

As I’ve said before, clear processes are half the battle won. If you use a time tracking app to determine what your most time-intensive processes are, then you can start introducing solutions to automate the highest-volume, lowest-impact elements of those processes.

Consider client onboarding, for instance. If you have processes that require manually typing in data to fill forms or complete tasks, you could spend time implementing an automated solution for eliminating error-prone data entry processes.

And if your data comes in on paper, deploying optical character recognition software can almost completely eliminate the need to dedicate man-hours to manually typing information into databases.

You can also make the process more efficient by creating smart forms for clients to fill out on their own time. Here, you can gather company details, project-related assets, and other necessary data all in one place. You could even take things a step further – don’t just automate the collection of data, automate the processing and communication data from there, too.

What about other high-volume, low-impact processes? If you are using emails to talk to your team and clients, it’s only a matter of time before “work” means “responding to emails” and you find yourself perpetually behind schedule.

Use a project management tool like Asana or TeamWork to reduce the amount of high-volume, low-impact tasks taking you away from the higher level, more strategic initiatives you can be working on. Using a project management tool helps you limit how often you check and respond to emails so that you can focus more time doing billable work.

These are just a few options that showcase how certain technologies can lead to powerful increases in workplace efficiency. When you start measuring the difference between billable and non-billable hours at your agency, you’ll know where those inefficiencies lie. Only then will you be able to take steps towards a specific, customized solution that fits your needs.

What is a Good Ratio for Billable vs. Non-Billable Hours?

There is no one-size-fits-all answer to this question. Some web developers and agency owners aim to spend no more than 25% of their time on non-billable projects. For others, even 25% is a longshot – they’re happy if they can reach a 50% compromise.

One of the main factors that determine how much time you should expect to spend on non-billable work is how your business is organized. For instance, a freelance web developer has to spend time marketing, making proposals, negotiating with clients, and so on – there is no infrastructure for the freelancer to rely on, and this can easily take up 50% of the workweek.

On the other hand, a large corporation uses complex bureaucracy to ensure that its employees spend 80-90% of their at-work time doing their specific job. Since everyone has one specific job, there are relatively few distractions. The marketing team handles marketing, the sales team handles sales, customer support handles ongoing customer relationships, and so on.

This can mean that for freelancers, banding together with serious, like-minded web developers can be a powerful motivator towards improving efficiency. If you can put together a team where everyone knows their job and does it well, you’re on your way to sustainable, efficient success.

Sometimes, the best way to get a job done is with a little help from a white-label service provider. UnlimitedWP can help you finish projects efficiently with skilled development on-demand.

UNLIMITED WORDPRESS TASKS One Simple Flat Rate

Have questions? Leave us a comment, we’re here to help.

Ronik Patel – Co-Founder, UnlimitedWP

Ronik Patel

After building my web agency JD Softtech in both Boston and Ahmedabad, India, I wanted to find a way to help other agencies.

So we took our team of highly qualified website developers and web designers and launched UnlimitedWP, a white-label WordPress partner for growing agencies.

If you’re frustrated by how much time working in WordPress takes, consider UnlimitedWP.com.

For one low monthly fee, you can create and assign an unlimited number of tasks to our team of WordPress experts—with a typical turnaround time of 24–48 hours.

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