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Time Tracking
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Track Billable vs Non Billable Time

For professionals struggling with managing billable vs. non-billable hours, Harvest offers precise tracking solutions to optimize productivity and billing accuracy.

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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 vs. Non-Billable Time

Billable hours are the backbone of any service-based business, representing the time spent on client-related tasks that directly generate revenue, such as project execution and client consultations. Non-billable hours, on the other hand, consist of necessary but non-revenue-generating activities like internal meetings and administrative work. These hours are crucial for business operations but can't be billed to clients. Understanding the distinction is vital for effective time management and profitability.

Misclassifying even 2-3 hours per consultant per week can lead to significant revenue losses, potentially exceeding $200,000 annually for a 10-person firm. In the legal industry, where average billing rates can be as high as $341 per hour, optimizing billable time is crucial. Effective tracking of both billable and non-billable hours can help identify areas for improvement and ensure accurate client invoicing.

The Impact on Profitability and Efficiency

Tracking both billable and non-billable time is essential for maximizing profitability and operational efficiency. For professional services firms, maintaining a high billable utilization rate—typically 75-85%—is crucial. Falling below these benchmarks can significantly impact revenue, as seen with law firms where only 37% of an average workday is billable, contributing to substantial revenue shortfalls.

Increased billable utilization from 65% to 75% can add $20,800 in annual revenue per consultant billing at $100/hour. Moreover, failing to track time accurately can result in losing 10-50% of potential billable hours. Implementing a robust time tracking system like Harvest helps mitigate these losses and optimize resource allocation by providing detailed insights into both billable and non-billable activities.

Best Practices for Tracking Time Effectively

Implementing best practices for time tracking involves establishing clear definitions for billable and non-billable tasks. Use a dedicated tool like Harvest to streamline the process, allowing for real-time tracking and categorization by project and client. Automation reduces errors from manual entries and ensures compliance with legal requirements.

Regularly reviewing time reports helps identify inefficiencies and optimize workflows. Setting realistic billable targets and time budgets for non-billable activities is also essential. Prioritizing high-value non-billable tasks, such as professional development, can support long-term success. Harvest's reporting capabilities enable these practices, providing detailed insights that drive strategic improvements.

Navigating Legal Compliance and Industry Nuances

Time tracking is subject to various legal and compliance obligations. In the United States, the Fair Labor Standards Act (FLSA) requires accurate record-keeping and compliance with overtime rules, while state-specific laws impose additional requirements. Internationally, the EU Working Time Directive mandates reliable systems for recording daily working time.

Industry-specific benchmarks also play a critical role. For example, law firms often aim for higher billable percentages compared to creative agencies. Harvest's platform supports these compliance needs by offering secure, tamper-proof records and features that align with industry standards, ensuring businesses can meet both legal and operational demands.

Track Billable vs Non Billable Time with Harvest

See how Harvest tracks billable and non-billable time, helping improve productivity and profitability.

Screenshot of Harvest tracking billable vs. non-billable time.

Track Billable vs Non Billable Time FAQs

  • Billable hours refer to time spent on tasks that generate revenue, such as client projects and meetings. Non-billable hours include necessary but non-revenue activities like administrative tasks and internal meetings.

  • Tracking both types of time helps businesses understand the true cost of operations, optimize resource allocation, and improve profitability. It also ensures accurate client billing and can identify areas for efficiency improvements.

  • To track time effectively, use a tool like Harvest that allows real-time recording and categorization by project or client. Regular review of tracked data can help spot inefficiencies and guide strategic improvements.

  • A good target for utilization rates is typically 75-85% for top-performing professional services firms. However, specific targets may vary by industry and business model.

  • Harvest provides robust tools for tracking billable hours, helping ensure accurate invoicing and optimization of client service delivery. It allows categorization and analysis of time spent on different tasks.

  • Yes, Harvest can track non-billable activities such as internal meetings and training sessions. This helps businesses manage the time investment in non-client activities effectively.

  • Legal requirements for time tracking include maintaining accurate records and complying with overtime rules. Harvest helps ensure compliance with these regulations by providing secure and tamper-proof record-keeping.