Have you read Part 1 in this series? Check out Top tips to maximise billable time – Part 1: Why setting a KPI isn’t enough.
The income from your billable hours needs to generate enough revenue to pay for your staff’s salaries plus all other overheads and expenses that your organisation incurs in service provision. In the first part of our Top tips to maximise billable time we discussed the importance of clear policies of what time is billable. It is equally essential that your staff understand that your service viability depends on their contribution to achieve your organisation’s billable hour target. We also discussed the dangers of setting targets that are unachievable and the impact it will have on your staff if you evaluate each staff member’s performance based on this figure alone.
Setting a billable hour KPI on its own is unlikely to optimise billable time. The real secret to success lies in understanding where your non-billable time goes.
What is non-billable time?
Genuine non-billable time is the time that you cannot charge for. It is the time in which your service delivery staff are performing tasks that do not generate any revenue while you still need to pay for their salaries.
Some typical non-billable tasks are:
- attendance in training or professional development
- administration such as recording travel claims or leave requests
- internal meetings, staff functions, interaction with colleagues
- answering emails and phone calls
- taking part in audits
- public holidays and leave entitlements.
Plus, there will be time for toilet breaks, drink breaks, dealing with a personal phone call, etc.
Most non-billable time has a purpose and without these activities your service would not run smoothly which is why a blinkered focus on billable hours can imply that networking, communication, or learning are unwanted activities. If you only track billable time, you will not gain a full understanding of how busy your frontline staff are. Monitoring and auditing non-billable time will give you a complete oversight of your staff’s workload and activities.
Find hidden billable hours
By self-monitoring and auditing their non-billable time your staff may find hidden billable hours. They may unveil associated service time that in fact should be invoiced as billable time, such as time spent writing case notes, or preparing for a client session. Both your staff and your customers will need to have a clear understanding on what is billable time. Also, your staff should be transparent towards customers what they did during this time (e.g. through case notes or detailed invoices).
Identify timewasting activities and grow your productivity
Although non-billable tasks are essential for running your service, there are many activities in your day that create little value to your organisation and your customers. Monitoring non-billable time helps to identify time wasting activities and will highlight areas that could be improved and streamlined. If these tasks are repetitive such as administration tasks you may be able to do them electronically or allocate them to your administration team.
Monitoring time will also help to understand productivity. If someone has low billable hours try to find out what changes or supports are needed to increase billable hours. This could be a simple measure of aligning working hours with service hours and establishing smarter schedules. At times, it could mean that a staff member must deal with too many disruptions or is spread among too many customers or programs or has to attend too many meetings.
Define your policies and improve the quality of non-billable time
Analysing your non-billable time can assist your organisation with policy setting. You can form a view on what value creating activities you want your service delivery staff to undertake, how often and for how much time.
In addition, it can help to improve the quality of non-billable time. Communication and meetings are important however maybe these could be shortened, or unnecessary travel time avoided. Informal training could be converted into formal training. Self-paced learning activities accessible through tablets or phones could fill unproductive gaps during the day. This could improve the quality of training and ensure more staff members can grow their knowledge and competence.
Tracking and recording time should not become a timewasting activity. Your CRM may be able to track time. Alternatively, there are simple time apps such as Harvest or Tsheets, that can make time tracking easy. As a start it might help if your service delivery staff write down for a set number of days how they spend their non-billable time.
By communicating expectations, asking your staff to track their non-billable time and expressing confidence in your staff‘s ability to grow their billable hours can give them ownership to identify what is working and what is not. It will help to identify time wasting activities, increase productivity and the quality of non-billable activities. It can also give your staff a stronger sense that their time, billable and non-billable is valuable. You will gain an insight if your staff is on target or needs more support to achieve maximum billable hours.