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Calculate Collection Rate

Harvest empowers teams and freelancers with precise time tracking and invoicing, streamlining your financial workflow and boosting productivity.

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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

How this hourly rate calculator works

It works back from the income you need to the rate you must bill, accounting for the hours you can't bill.

  • Billable hours/year = working weeks × hours per week × billable %.
  • Break-even rate = (target income + business expenses) ÷ billable hours.
  • Recommended rate = break-even plus a 20% buffer for taxes, slow periods, and profit.

Raising your billable percentage or trimming expenses lowers the rate you need.

Calculate Collection Rate with Harvest

Discover how Harvest can streamline your billing process and help you achieve optimal collection rates with precise tracking tools.

Harvest dashboard showing collection rate calculation tools

Calculate Collection Rate FAQs

  • A collection rate is the percentage of billed amounts that are successfully collected. It's crucial for maintaining cash flow and financial health, ensuring that a business can meet its obligations and invest in growth.

  • The collection rate is calculated by dividing total payments by total charges, then multiplying by 100. For net collection rate, use collectible charges after adjustments. This formula helps assess billing efficiency.

  • A good net collection rate in healthcare typically exceeds 95%. Top providers aim for 99% or higher, indicating efficient billing and collections processes.

  • Older debts are harder to collect. Debts over two years old see declining recovery rates, while debts less than 6 months old can achieve up to 90% recovery in B2B scenarios.

  • To improve collection rates, streamline billing processes, offer digital payment options, and maintain regular follow-up on outstanding invoices. These practices enhance cash flow efficiency.

  • Offering digital payment solutions can reduce the average collection period by up to 30%, making it easier for clients to pay promptly and improving overall collection rates.

  • Benchmarks vary by industry. In healthcare, a net collection rate of 95% or higher is typical. Debt collection agencies average 20-30% recovery, with higher rates for newer debts.