Harvest
Time Tracking
Sign up free

Billable Hours Calculator for Design Firms

Design firms often struggle with tracking billable hours accurately, risking revenue loss. Harvest solves this with precise time tracking and flexible billing rates.

Try Harvest Free

How much revenue is your team leaving on the table?

Most agencies run at 55-60% utilization. Even a small improvement means significant revenue. See what closing the gap looks like for your team.

Number of people who track billable time
$
Blended rate across roles (junior, senior, lead)
55%
Percentage of total hours that are billable. Industry average is 55-60%.
75%
A realistic target for service businesses is 70-80%.
Monthly revenue gap $0
Revenue at current utilization $0/mo
Revenue at target utilization $0/mo
Extra billable hours needed per person/day 0h
Annual revenue opportunity $0

Start tracking team utilization

Walk through the entire flow below. Start a timer, check your reports, and create a real invoice — all in three clicks.

Go ahead — start tracking!

One click and you're timing. Try it right here: start a timer, add an entry, edit the details. This is exactly how it feels in Harvest.

  • One-click timer from browser, desktop & mobile
  • Works inside Jira, Asana, Trello, GitHub & 50+ tools
  • Duration or start/end — your call
  • Day, week & calendar views to stay on top of it all
  • Friendly reminders so no hour gets left behind
Acme Corp
Website Redesign
Homepage layout revisions
1:24:09
Content Strategy
Blog calendar planning
1:30:00
SEO Audit
Technical audit report
0:45:00
Brand Guidelines
Color system documentation
2:15:00
Logo Concepts
Initial sketches round 1
1:00:00
Today's total 6:54:09

Understanding Billable Hours in Design Firms

Design firms often face the challenge of accurately tracking billable hours, which are crucial for profitability and client transparency. Unlike other industries, design projects incorporate diverse activities, such as creative brainstorming, client meetings, and project management, all of which need precise tracking. Missteps in capturing these hours can result in significant revenue losses. Studies indicate that failing to track billable hours accurately can lead to a potential $50,000 revenue loss annually. Additionally, design firms typically aim for a healthy ratio of 70-80% billable to non-billable time to ensure profitability.

Harvest offers a reliable solution with its one-click start/stop timers and manual time entry options, allowing design firms to capture every minute spent on billable tasks. By utilizing Harvest's detailed reports, firms can gain insights into their time management and ensure that no billable opportunity is missed.

Setting the Right Billing Rates for Design Projects

For design firms, determining appropriate billing rates is pivotal to cover overhead costs and secure profitability. Typically, new architects may charge between $150-$200 per hour, while their senior counterparts charge upwards of $350-$400. To ensure comprehensive coverage of expenses, a common practice is to multiply an employee's hourly salary by 2.75 to 3. This calculation helps account for overheads and benefits, establishing a break-even rate between 2.5 to 2.8 times the salary.

Harvest empowers design firms with flexible per-project and per-person rate settings. This feature allows firms to tailor rates specific to roles, such as Project Managers or Designers, ensuring alignment with project and client expectations. By leveraging Harvest's rate-setting capabilities, firms can maintain competitive pricing while safeguarding their profit margins.

Maximizing Utilization Rates for Design Teams

Utilization rate is a critical metric for design firms, reflecting the percentage of billable hours out of total available hours. Industry benchmarks suggest that a healthy utilization rate for creative agencies is around 65-75%, with architecture and engineering firms often reaching 81.9%. Achieving these benchmarks is essential for maximizing profitability without overburdening the team.

With Harvest's detailed reporting tools, design firms can monitor their utilization rates closely. These reports offer insights into the distribution of billable versus non-billable hours, enabling firms to identify inefficiencies and adjust workloads accordingly. By maintaining a balanced utilization rate, firms can ensure optimal productivity and employee satisfaction.

Streamlining Invoicing and Client Communication

For design firms, efficient invoicing is as crucial as accurate time tracking. Providing clients with transparent, detailed invoices can prevent disputes and foster trust. In the design industry, it is common to include a 20% markup on out-of-pocket expenses to cover administrative efforts. Moreover, predictable billing intervals, such as monthly or project milestone-based billing, help maintain cash flow.

Harvest simplifies the invoicing process by allowing firms to create, send, and manage professional invoices directly from tracked time. This integration ensures that every billable hour is accounted for and communicated clearly to clients. By using Harvest, design firms can enhance client relations and streamline their financial operations.

Track Billable Hours with Harvest

See how Harvest helps design firms efficiently track billable hours and manage project costs with customizable rates and detailed reporting.

Screenshot of Harvest tracking billable hours for design firms

Billable Hours Calculator for Design Firms FAQs

  • Design firms track billable hours using tools like Harvest, which offers one-click start/stop timers and manual time entry for precise tracking. This ensures all time spent on client projects is accurately logged.

  • A healthy utilization rate for design firms typically ranges from 65-75%. This rate ensures profitability without overextending team resources, balancing billable and non-billable activities effectively.

  • Harvest allows design firms to set flexible per-project and per-person rates, enabling them to tailor billing according to specific roles like Project Managers or Designers, ensuring competitive and profitable pricing.

  • Harvest simplifies invoice management by allowing firms to create and send invoices directly from tracked billable hours. This integration ensures accurate billing and clear client communication.

  • Design firms often bill hourly, with common practices including a 20% markup on expenses for administrative coverage and predictable billing intervals like monthly or tied to project milestones.

  • Overhead costs can be calculated by multiplying an employee's converted hourly salary by 2.75 to 3, which accounts for administrative expenses and benefits, ensuring all costs are covered in the billing rate.

  • Non-billable activities in design firms include internal meetings, administrative tasks, training, and business development. Tracking these separately from billable hours helps maintain accurate project profitability insights.