Billable utilisation
Billable utilisation is the share of working hours invoiced to customers, calculated as billable hours divided by the total hours logged.
Also known as: billable rate, utilisation rate, fakturagrad
Billable utilisation shows how much time goes to work the customer pays for, and how much goes to internal time: quoting, administration, training, travel that is not invoiced and overruns on fixed-price jobs. It is calculated as billable hours divided by total hours, per employee, per department or per project. Some companies calculate against available hours rather than logged hours; the definition then has to stay the same over time for the figures to be comparable. Billable utilisation is a key measure in consulting engineering firms, consultancies and trade companies that bill by the hour. The figure is never better than the time tracking behind it: if hours are logged late or on the wrong project, both the utilisation figure and the invoice are wrong.
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Related terms
- Project accounting — Project accounting is the tracking of income and costs per project: budget or estimate, hours and purchases incurred, amount invoiced and the expected result when the project is finished.
- Post-project costing (estimate vs actual) — Post-project costing compares what a project or order actually cost with the estimate the quote was based on.