Time is money, especially in a service-based business, but not all hours are created equal. Some generate revenue (billable hours), while others support business operations without direct compensation (non-billable hours). The challenge? Striking the right balance between the two to boost profitability. This is where time-tracking software comes in, making it easier for project managers to track billable and non-billable hours.
If you’re spending too much time on non-billable tasks, your revenue suffers. But ignoring non-billable activities like business development, training, or client relationship management can stunt long-term growth.
That’s why accurate time tracking is essential. It helps businesses measure productivity, optimize workflows, and ensure every minute is used efficiently.
In this guide, we’ll break down the difference between billable and non-billable hours, explain how to track them effectively, and share strategies to maximize profitability.
What Are Billable and Non-Billable Hours?
Billable Hours
Billable hours refer to the time spent on tasks that can be directly invoiced to clients. These include:
- Client meetings related to project work
- Project execution and deliverables (design, development, consulting, etc.)
- Revisions and updates requested by the client
- Research and planning specific to the client’s project
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