Tracking Billable Time / Billing Rates
For professional-services firms, like attorneys, accountants, architects, and consultants, tracking billable time is the origin of all client invoices and fee collections. But did you know that firms who don't bill hourly can also use ClickTime's Billing Rate features?
| Myth #1: | The fixed-fee consulting firm: "Our firm does all projects on a fixed bid, so it's really not important that we track billing rates. We just want to note the number of hours we invest in projects." |
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| Fact: | Even in fixed-bid situations, it's critical to track time as if it were billable. Using a reasonable market-equivalent billing rate, each project can be compared to the alternative of an hours-based fee. If the fixed-bid differs widely from this, your fixed bids need to be re-evaluated. Plus, each project can be analyzed after completion to judge its fees as appropriate or not, which makes estimating future jobs much easier. Tracking the "effective" billable fee has caused some firms to reconsider the guesswork in their fixed-bid systems and shift some projects to time-based billing. |
| Myth #2: | The in-house IT department: "Our time tracking is just for in-house IT projects, to see how much time our staff works on projects. We don't even have clients." |
| Fact: | IT departments are always faced with build vs. buy decisions for technology projects. Application development, network design, and software implementation can be procured from outside consultants or performed internally. How do you make an intelligent decision and measure your effectiveness? If you can demonstrate that your internal costs (as reflected in the Billing Rates you design in ClickTime) are lower than the same services from an outside vendor, it reinforces the effectiveness of your decisions when they must be justified to upper management. In addition, the practice of departmental cost-recovery is impossible without tracking internal billing rates. |
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