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Calculate Revenue From Billable Hours

Harvest helps you calculate revenue from billable hours accurately with robust time tracking and flexible billing rates, addressing up to 50% potential revenue loss from delayed entries.

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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 and Their Impact on Revenue

Billable hours are the cornerstone of revenue generation in professional services, representing the time directly charged to clients for completed work. The clear distinction between billable and non-billable hours is crucial. Billable hours include client meetings, project work, and deliverables, while non-billable hours cover administrative tasks and internal meetings. Failing to accurately track these hours can result in substantial revenue loss. In fact, up to 50% of potential revenue can be lost by not recording time promptly. Harvest aids in mitigating this risk by providing tools for accurate time tracking, ensuring that every billable minute is captured and invoiced.

Accurate tracking of billable hours is not just about revenue collection; it also enhances client transparency and satisfaction. By clearly documenting the time spent on each task, businesses can build trust and justify their fees. Harvest's detailed reporting capabilities allow teams to keep track of billable versus non-billable hours effectively, ensuring that client billing aligns with the actual work performed.

Setting Optimal Billable Rates for Maximum Profitability

Determining the right billable rate is essential for maximizing profitability. This involves calculating the Average Cost Per Hour (ACPH) by summing all annual costs, including salaries and overhead, and dividing by total available work hours. Setting a target delivery margin helps to establish a profitable billable rate. For example, if costs are $100/hour and a 20% profit margin is desired, the rate should be set at $125/hour. Harvest supports this process by allowing flexible rate settings per project or person, ensuring alignment with financial goals.

Beyond determining rates, it's crucial to regularly review and adjust them based on market trends and client expectations. Harvest's time tracking and invoicing features facilitate this by providing insights into project profitability and cost-effectiveness, allowing businesses to make informed decisions about rate adjustments.

Maximizing Revenue Through Effective Time Tracking

Effective time tracking is vital for maximizing revenue from billable hours. Delayed time entry can significantly impact revenue, with potential losses reaching $50,000-$75,000 annually for professionals billing $350/hour. Harvest mitigates this risk with its one-click timers and automated logging, ensuring that time is recorded as work occurs, preserving billable hours.

Additionally, tracking time in increments, such as the standard 6-minute intervals used in legal billing, can capture more billable hours. Harvest accommodates this need by offering flexible time tracking increments, enabling professionals to maximize their billable hours and, consequently, their revenue. This meticulous tracking supports higher utilization rates, which are critical for achieving financial targets in any service-based business.

Leveraging Utilization Rates for Business Growth

Utilization rates, a measure of the percentage of working hours spent on billable tasks, are a key performance indicator for service firms. A 70-75% utilization rate is often the benchmark across industries, yet many firms fall short of this target. Harvest provides detailed team utilization reports, offering insights into how time is allocated and identifying areas for improvement. This ensures that teams are working efficiently and maximizing their billable hours.

Improving utilization rates involves strategic planning and resource allocation. Harvest helps businesses analyze these patterns and devise strategies to delegate non-billable tasks, streamline operations, and focus on high-value client work. By maintaining high utilization, firms can enhance their revenue generation and overall business growth.

Calculate Revenue With Harvest

See how Harvest tracks billable hours to help you accurately calculate revenue, with flexible rates and detailed reports.

Harvest dashboard showing billable hours tracking.

Calculate Revenue From Billable Hours FAQs

  • To calculate revenue from billable hours, multiply the total billable hours by the hourly rate. This straightforward method ensures you account for all client work performed. Harvest simplifies this process by tracking billable hours and applying the correct rates, ensuring accurate invoicing.

  • Billable hours are the time spent on client work that is directly chargeable, such as meetings and project tasks. Non-billable hours include administrative duties and internal meetings. Harvest helps distinguish between these by tracking both types with flexible rates for accurate revenue calculation.

  • Harvest offers one-click timers and manual entry options to accurately track both billable and non-billable hours. It supports tracking in increments, like 6-minute billing, which is vital for fields that require precise timekeeping, ensuring no billable minute is lost.

  • Utilization rates indicate how much of your work time is billable. Maintaining high utilization rates is crucial for maximizing revenue. Harvest provides detailed reports to help businesses monitor and improve utilization, enhancing profitability and resource efficiency.

  • Yes, Harvest allows you to set and adjust billing rates per project or person, helping you align with market trends and financial goals. This flexibility ensures your rates are competitive and profitable.

  • Delayed time tracking can result in significant revenue loss, with potential losses reaching up to 50% of billable hours if not recorded promptly. Harvest's real-time tracking prevents this by capturing hours as they occur, safeguarding your revenue.

  • Harvest streamlines the invoicing process by converting tracked time into professional invoices. This ensures accuracy and efficiency, reducing the administrative burden and improving cash flow through timely billing.