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Time Tracking
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Billable vs Non Billable Hours

Harvest helps teams and freelancers efficiently track billable vs non-billable hours, optimizing profitability with precise time management tools.

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What should you charge per hour?

Most freelancers and consultants dramatically undercharge. This calculator accounts for what most people miss: non-billable time, taxes, and overhead.

$
Accounting for vacation, holidays, sick days
60%
Most freelancers can bill 50-70% of their time. The rest goes to admin, marketing, proposals, and learning.
$
Software, insurance, equipment, accounting, taxes beyond income tax, etc.
Your break-even rate $0
Recommended rate (+20% buffer) $0
Billable hours per week 0h
Equivalent daily rate $0

Start tracking your billable hours

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 vs Non-Billable Hours

Billable and non-billable hours are essential concepts for those in professional services, directly impacting profitability and client relations. Billable hours refer to the time spent on tasks that can be charged to a client, such as project planning, client meetings, and deliverable creation. On the other hand, non-billable hours include operational tasks that are not directly billed to clients, such as administrative duties and internal meetings.

Understanding these distinctions is critical, as it directly influences how businesses manage their resources and pricing strategies. For example, a firm with a 75% billable utilization rate is considered optimal for sustainability, whereas struggling firms often fall below 55%. Misclassifying work can lead to significant revenue loss, with some estimates suggesting $200,000 annually for a 10-person firm.

The Financial Impact of Time Tracking

Accurate tracking of billable and non-billable hours is crucial for maximizing revenue and maintaining operational efficiency. Many firms aim for a utilization rate of 60-80%, translating to billing 30 hours out of a 40-hour workweek. However, nearly 20% of billable hours go unrecorded, costing businesses around $63,807 per employee annually.

Increasing billable utilization from 65% to 75% can add $20,800 in revenue per person. By leveraging a tool like Harvest, businesses can accurately track time and ensure that billable hours are maximized, while non-billable tasks are minimized and effectively managed.

Best Practices for Managing Billable and Non-Billable Hours

Effective time management requires clear policies and robust tracking systems. Firms should establish a clear time-tracking policy that explicitly differentiates between billable and non-billable tasks. Using real-time tracking tools like Harvest helps prevent forgotten entries and manual errors, ensuring accurate billing.

Incorporating automated solutions, such as Harvest's one-click timers and detailed reports, streamlines the process and enhances accuracy. Regularly reviewing time tracking data allows businesses to identify trends and adjust operations for improved efficiency.

Harvest: A Solution for Accurate Time Tracking

Harvest provides comprehensive tools for managing billable and non-billable hours, essential for service-based industries. With features like one-click timers and flexible rates, Harvest ensures accurate tracking and reporting, helping firms optimize their resource allocation and improve profitability.

By integrating with popular platforms like Asana and Slack, Harvest simplifies workflow management and enhances team collaboration. The detailed reports generated by Harvest offer insights into utilization rates and aid in strategic planning, making it an invaluable tool for professional services firms.

Track Billable vs Non-Billable Hours with Harvest

See how Harvest helps manage billable vs non-billable hours, optimizing your workflow for better profitability and efficiency.

Billable vs Non Billable Hours tracking in Harvest screenshot

Billable vs Non Billable Hours FAQs

  • Billable hours are the time spent directly on tasks that can be charged to a client, such as project work, client meetings, and deliverable creation. These hours contribute directly to revenue generation.

  • Non-billable hours refer to time spent on essential business operations that aren't charged to clients, like administrative tasks, internal meetings, and training. While necessary, they don't directly generate revenue.

  • Tracking both types of hours is crucial for managing resources effectively, setting accurate pricing, and maximizing profitability. It helps identify inefficiencies and ensures that billable work is prioritized.

  • Harvest provides tools like one-click timers and detailed reports that make tracking both billable and non-billable hours simple and accurate, helping firms optimize their resource allocation and profitability.

  • Common billable tasks include client-specific work like project planning, deliverable creation, and client meetings. These tasks are directly chargeable and generate revenue for the business.

  • Firms often struggle with forgotten entries, manual errors, and inconsistent logging. Harvest addresses these challenges with real-time tracking and automation, ensuring accuracy and efficiency.

  • Harvest improves team utilization by providing insights into how billable hours affect productivity. Its detailed reporting tools help managers allocate resources efficiently and track performance.