How to Increase Billable Hours Ethically and Efficiently

Author: The EARLY Team

If you’re here, you’re not merely content with how many billable hours you capture, and you’re under the impression that some of these are slipping through the cracks.

As a freelance writer managing a team, I’m always paying attention to how to increase billable hours, so I can invoice as much as possible.

Key takeaways:

What are billable hours?

Billable hours represent the time you can charge for, as during this time, you’re directly working on client projects or deliverables. For agencies and any type of companies that invoice their time, billable hours are the backbone of revenue generation.

Unlike admin tasks or internal meetings, billable hours contribute directly to your bottom line. A report on digital agencies states that the average employee is expected to bill 25 hours per week. The same employee is expected to work other 13 hours on non-billable hours or tasks for a total expected weekly commitment of 38 hours.

According to the Yale Law School Career Development Office, a law firm averages a yearly range between 1700 and 2300 billable hours. As the bar is raised, knowing how to increase your billable hours without sacrificing your work-life balance is essential.

But here’s the challenge most service firms face: the average professional only bills 4 hours in an 8-hour workday. The rest? Lost to admin tasks, interruptions, and inefficiencies.

That’s a lot of potential revenue slipping through the cracks.

How to increase billable hours

Let’s get practical. I’ll introduce you to proven strategies to help your team maximize billable hours without having to work overtime or choosing dodgy and unethical ways in the client billing process.

On the contrary, I suggest you think of ways to reduce overtime, and you’ll see your billable hours chart plummeting, too, as overtime is counterproductive and, in fact, decreases business efficiency;

1. Make the rules of tracking billable hours crystal clear

Ambiguity around what counts as billable and non-billable hours leads to inconsistent tracking and lost revenue. I’ve seen firms lose thousands in billable hours simply because team members weren’t sure if certain activities “counted.” Here’s what to clarify:

Define billable activities with precision

Rather than making vague guidelines, create specific examples for your industry. For instance, “Client emails over 10 minutes” or “Research directly related to client deliverables.”

Also, different industries have different standards for what constitutes billable work. It’s worth noting these and making your team aware of them:

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Keep your projects’ time and budgets safe with the most accurate time tracking solution

Learn how to maximize billable hours, and keep track of budget with EARLY!

Create a reference guide and address the gray areas

Create a simple one-pager where you outline what is and isn’t billable. One law firm I worked with created a decision tree that made it clear for each employee which activities were billable and which were not.

Also, create clear policies for tasks that are ambiguous (like travel time or brief client calls), so your team knows how to track billable hours accurately. Should they track time on travel, and at what rate? Should they track time as long as five minutes, or should this be ignored? Other possible questions for your guide could be the following:

Note that the decision of what types of time and not is yours, you won’t find standard guides on this topic. Ultimately, you should guide your choices on principles of ethics and authenticity, considering what your clients are likely to accept.

Set minimum increments

One important note that you should account for is that most professional service firms bill in 6, 10, or 15-minute increments. If it’s your case, too, be explicit about it in your policy. If you bill in 15-minute increments, a 5-minute client call might still be billed as 15 minutes.

Remember, without clarity, team members often default to not billing time when they’re uncertain. This under-tracking directly impacts your bottom line.

2. Explain the mutual benefits of accurate tracking

Your team needs to understand why accurate billable hour tracking matters, both for the company and for them personally.

Also, when people understand the “why,” compliance dramatically improves, share these benefits:

Increase client’s trust with transparent invoicing

With EARLY, you can access accurate reports with just one click

3. Make tracking billable hours effortless

The easier you make it for your team to track time, the more compliant they will be. Complicated systems or burdensome processes create resistance and lead to inaccurate data. The best practices you can implement include:

One consulting firm I worked with increased their tracked billable hours by 22% simply by switching from their clunky legacy system to a modern, user-friendly time-tracking software. The time was always being worked, but it just wasn’t being captured before.

4. Minimize non-billable activities

Every minute spent on non-billable work is a minute you can’t charge clients for. The key is identifying which non-billable activities are necessary and which can be reduced or eliminated.

For example, I worked with a marketing agency that realized their creative directors were spending 7+ hours weekly on routine reporting tasks. What did they do? They delegated all reporting to junior staff and started using automated time reporting systems.

Try these approaches:

5. Improve workflow efficiency

Beyond minimizing non-billable tasks, you can increase billable hours by completing client work more efficiently without sacrificing quality. This involves streamlining processes, eliminating bottlenecks and building overall better workflow processes.

Consider these tactics:

  • Batch similar tasks: Group similar activities (client calls, document reviews, etc.) to reduce context-switching costs. Context switching can waste up to 40% of your productive time and wasted valuable time that could be turned into billable hours.
  • Implement standard processes: Create clear workflows for common client deliverables and the billing process if needed so your team members don’t waste time figuring out the next steps.
  • Identify and resolve bottlenecks: Set clear project management goals and KPIs, based on which to locate workflow chokepoints and address them. Often, small process tweaks can dramatically improve the output.

6. Optimize time management

Time management strategies can significantly impact billable hours. The good news? Time management can be taught and improved.

Effective strategies include:

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7. Leverage technology and tools

The right technology stack dramatically increases billable hours by automating repetitive tasks and streamlining your core work processes. Consider these tech solutions:

  • Implement practice-specific software: Industry-specific tools often include built-in templates and automation for common deliverables. Such examples are EARLY for time tracking, Notion for knowledge management, and Zoho Projects as a project management tool.
  • Use document automation: Tools that automate document creation and management will save tens of hours of billable time, especially in document-heavy fields like law or accounting.
  • Adopt AI assistants: From research summaries to first drafts, AI tools handle time-consuming but straightforward tasks, freeing your team for higher-value billable work.
  • Utilize client portals: Self-service client portals reduce time spent on routine client communications while still maintaining service quality.

9. Create effective schedules

Strategic scheduling a well-designed employee schedule, takes into account employee availability, skills, and task dependencies, ensuring that the right individuals are allocated to projects that align with their expertise.

One good example of an effective work schedule is one legal team I consulted with that restructured their weekly schedule, moving all internal meetings to Wednesday afternoons. This created four and a half uninterrupted days for billable client work each week, resulting in a measurable increase in billable hours without extending workdays.

Effective scheduling approaches include:

Time tracking apps and their impact on increasing billable hours

The single most effective tool for boosting billable hours isn’t another productivity technique or workplace policy; it’s implementing the right time-tracking app. Why? Because even the most productive professionals can’t bill for the time they don’t capture.

In order to detail why a time-tracking app is a game-changer if you’re looking to maximize your billable hours, I’ll take EARLY and its features as an example.

Unlike clunky legacy systems that create friction and resistance, EARLY makes billable hour tracking effortless. With EARLY’s features, you can:

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Track every billable minute with the most accurate time tracking tool that your team will enjoy

The sustainable approach to increasing billable hours

The strategies above have a common thread: they focus on working smarter, not just longer. The goal isn’t to squeeze more hours from an already busy team, but it’s to make sure the hours worked are productive, properly tracked, and appropriately billed.

Remember that sustainable billable hour increases come from:

By implementing these strategies thoughtfully, you can increase your firm’s billable hours sustainably without demanding nights and weekends from your team.

Sources

https://prometheanresearch.com/2023-digital-agency-industry-report

https://law.yale.edu/sites/default/files/area/department/cdo/document/billable_hour.pdf