You may be losing a lot of money if your company is using an hourly billing model. The reason? There are many tasks that don’t take up much time at all, and many businesses don’t add them to their billable hours total. Yet, these small tasks (phone calls, briefings, etc.) add up to quite a significant portion of an employee’s workday.
In other words, you should aim to prevent losing money on tasks that are significant to the projects but don’t last enough to count them toward an hourly rate. This is where billable hours tracking plays a significant role.
Many businesses use the quarter-hourly approach in order to do so. That means they track any task that took 15 minutes or more. Yet, again, there are still tasks that take less time and can be crucial to the project.
That is why we suggest using a billable hour chart that is set to six-minute increments. This is the usual practice in many law firms. You may be wondering – why six minutes? And the answer is simple. An hour has 60 minutes, and six minutes make up for 0.1 hours. This way you can get extremely accurate in counting your billable hours and deliver accurate invoices to your clients.
As you may suppose yourself, many clients won’t be happy after getting charged for a task that took six minutes to complete. That is why you need to be transparent about your billing method right from the start. This may mean creating different rates for tasks of secondary importance. Yet, it is still better to charge at a lower fee than none at all.
Of course, the time increments and rates depend highly on your industry and the level of both your company and your clients. That is why it is important to be as detailed about tracking your time as possible when using a billable hours chart.
If you decide to use this method, you will need to track time as the day progresses, and not wait until the end of the day. This is true because you’re bound to forget or overlook a task. This is the main difference between using a timesheet and a chart.
Both approaches have their advantages and flaws, and we hope our guide has helped you in making your decision.
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