Billable and non-billable hours are both work

What counts as non-billable work

Non-billable work is any hour spent for the agency rather than for a client. Most of it is planned and useful, and some of it wins your next contract.

You'll recognise the usual list. Each item is time a person spent working, even though no client pays for it directly.

• Proposals, pitches and scoping calls before a contract is signed
• Internal tools, templates and your own website
• Training, mentoring and code reviews
• Team meetings, planning and one-to-ones
• Fixes on a fixed-price project after its budget has run out

Track only billable hours and the rest looks idle

Plenty of agencies ask their people to log client time and nothing else. That feels efficient, and it hides a large part of the week.

Take a designer with a 40-hour week who logs 28 hours on client projects. If the other 12 hours go unlogged, the report says she spent 30% of her week doing nothing. In fact she spent it on a pitch and a design system your whole team uses.

Now you've lost two things. You can't see what the pitch cost in time, and you can't tell a quiet week from a busy one spent on internal work.

Log every hour against a project

Your fix is simple: make internal work a project too. Give a pitch, your internal tools and training a project each, flagged non-billable. People then log to them the same way they log client time.

In PeopleMuster your team logs each day in the daily recap, hours per project. Your week's summary shows logged hours against expected hours, so a gap stands out before the week closes.

Managers approve timesheets from one queue, and a Needs Attention view gathers the entries to look at. A logging window you set decides how far back a person may still add hours.

Read the billable share, not the total

Once every hour is logged, you can read two numbers from one timesheet. Total hours tell you how much your team worked. Your billable share tells you how much of it went to clients.

In the worked example, 28 of 40 hours is a 70% billable share. You can see the other 30% now, split across a pitch, a tool and a review, and you can decide whether that mix is right.

PeopleMuster's utilisation report breaks hours down by project and by department, with a week-over-week trend. You can also filter the projects list to billable or non-billable in one click.

Plan both kinds of work

Non-billable work needs room in the plan, or it gets squeezed into evenings. Put it on the capacity plan the same way you put client work there.

PeopleMuster's capacity grid filters by billable and non-billable, so you can see the client load apart from internal time. Approved leave and company holidays show on the same grid, and every project also carries a fixed-price or hourly flag.

If a fixed-price project keeps pulling non-billable hours, you'll see it in the grid and in the report. That's the conversation to have with the account lead this week.