About time to talk about... time

We love talking about ideas, inspiration and motivation at the Bureau, but sometimes we need to get down to the nuts and bolts of running a business. And there’s nothing more basic than money. Last week in the Bureau Slack there was a great conversation about what kind of billing utilization strategies will keep the shop in the green without the team seeing red.

Billing Time

As an owner or leader, you know how carefully you have to take care of your assets. And the two most valuable commodities you have are your team and your time. So it’s natural that you need to be deliberate about how you ask people to track their time, how much time you allot for breaks, and so on. After all, billable hours are what helps you pay the bills, but you have to be sensitive to your team's health as well.

We recently had a great convo in the Bureau Slack about just this very topic, and from that discussion, a few themes emerged.

  • First, a significant number of companies seem to be getting between 35 and 40 billable hours per week from their staff. Some are getting more like 32, so in addition to expectations, a big factor seems to be how much of an employee's tasks constitute billable hours.

  • Next, most shops offer some flexibility as to how employees get their hours in each day. While most folks are putting in ~40 hours a week, I see a lot of owners who are compassionate about personal needs like taking breaks and caring for family.

  • Finally, it looks like there’s sometimes a disconnect between what employers are asking and what is a reasonable work expectation. There are always activities that need to be done but are difficult to charge to a specific project. This varies a lot between people depending on their role in the company. Some roles are never going to get close to billing clients eight or even six hours, and that's ok!

How to Set Billable Hours Expectations

You need to find that sweet spot where you’re getting the best value out of your employees -- keeping them productive but not frustrated. Here are a few things to consider.

  • Charge the right amount
    If your average hourly rate is set effectively, you can absorb the time spent doing things like pitching to new clients, team meetings, and of course, paying for non-billable roles that don’t directly serve clients.

  • Talk to your team
    This is kind of a “duh” one, but if you’re looking to understand what’s fair you need a sense of what people are actually doing with their time. Are they spending time in pointless meetings, constantly trying to find that elusive spreadsheet, or just taking longer on a task than you expected? Listen to their feedback and find a billable time percentage that is fair for everyone.

  • Automate non-billable work as much as possible
    There are a lot of tools available that can help reduce the amount of mundane tasks your people engage in, like pulling KPIs from websites or complicated spreadsheets for tracking utilization. They can be an investment that pays off by giving employees more time to bill clients

  • Consider operations software
    One specific tool that can really help is the right operations software. These tools can help with simple things like inputting time but can become more robust to include resource planning and forecasting. They often integrate with other productivity tools and can give you a better view of the present as well as insights into the future. 

As a leader, you’re responsible for taking into account all the factors that affect your profit, including workloads, utilization goals, and your employees’ well-being. Take some time to evaluate your current policy and see how it reflects what people are actually spending time on and whether any adjustments are needed.

It’s not all about the Benjamins, but your passion for this work will only take you so far without the cash reserves to back it up. When you get it rocking though, employees will track their time with minimal stress while easing your mind on the financial front.

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