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A billable-hour revenue total answers one direct question: how much client-facing value did approved billable work create before or after adjustments. The cleanest version multiplies approved billable hours by the applicable billing rate. For U.S. work, the result is normally denominated in U.S. dollars because United States coins and currency, including Federal Reserve notes, are legal tender for debts, public charges, taxes, and dues.
This total is useful before sending an invoice, reviewing project profitability, forecasting monthly revenue, or checking whether a retainer is on pace. It is not the same as total hours worked. Internal meetings, admin time, training, and other non-billable entries can affect utilization and cost, but they do not belong in the revenue subtotal unless the client agreement makes them billable.
The basic formula is approved billable hours multiplied by the billing rate. If the work uses more than one rate, calculate each rate line separately, then add the results. Apply write-downs after the gross billable amount so you can see both the earned value and the amount you actually plan to invoice.
For example, a client migration project includes 37 approved architecture hours at $155 per hour and 19 approved testing hours at $95 per hour. The architecture line produces $5,735, and the testing line produces $1,805. Gross billable revenue is $7,540. If you write down $380 before invoicing, the invoice revenue becomes $7,160 before any applicable state or local tax.
U.S. billable-hour revenue should not assume a single national tax add-on. The United States has no federal VAT/GST, and sales tax treatment is state and local. Some services are taxable in some jurisdictions and not taxable in others, so a U.S. billable-hours calculation needs a jurisdiction-specific tax input when the service is taxable.
Keep the service revenue subtotal separate from any tax line. That prevents a common mistake: treating tax collected from the client as earned service revenue. For example, Texas taxes taxable services at a 6.25% state sales and use tax rate, with local jurisdictions able to add up to 2% for a maximum combined rate of 8.25%. That tax input belongs after the billable revenue subtotal.
A one-off calculation is enough when you already have approved hours, confirmed rates, and a single adjustment to check. It is also enough for quick quote validation, month-end spot checks, or comparing a client's requested write-down against the original billable value. The calculation stops being enough when entries are still changing or approvals are incomplete.
A managed workflow is better when revenue depends on continuous time capture, billable and non-billable flags, approval, rate rules, and invoicing handoff. Everhour Billing & Invoicing converts tracked billable time and expenses into invoices, calculates invoice amounts from rates while excluding non-billable tasks, and can export invoices to QuickBooks Online, Xero, or FreshBooks.
This content is for general information only, may not be fully up to date, and is provided without any warranty or liability.
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Multiply approved billable hours by the billing rate, then add separate rate lines together. If the invoice includes a write-down, subtract it after calculating the gross billable value. Keep sales tax, gross receipts tax, or similar state and local charges separate from service revenue unless your reporting policy explicitly combines them.
Multiple rates require separate line calculations. Do not average the rates first unless you only need a rough internal estimate. For invoice-ready revenue, multiply each person, role, task, or project rate by its own approved billable hours, then add the line totals. This preserves the rate basis behind the final amount.
No. Billable revenue is the value created by approved billable time at the agreed rate. Invoiced revenue is the amount placed on the invoice after write-downs, discounts, fixed-fee limits, or excluded entries. Keeping both numbers visible helps you measure realization and explain why the invoice differs from the raw time value.
Not in the service revenue subtotal. The United States has no federal VAT/GST, and sales tax is determined at the state and local level. If a service is taxable in the relevant jurisdiction, calculate the tax as a separate line after the billable-hour revenue subtotal so revenue and tax collected stay distinct.
The most common mistake is including non-billable work in the revenue base. Internal coordination, admin cleanup, unpaid revisions, and entries marked non-billable should stay out of the billable subtotal. If those hours matter for profitability, use them in utilization, cost, or effective billing rate analysis instead of invoice revenue.
Everhour Billing & Invoicing turns tracked billable time and expenses into client invoices. It calculates invoice amounts from rates, time, and billable expenses while excluding non-billable work, then can export invoices to QuickBooks Online, Xero, or FreshBooks with invoice status synced back to Everhour.
Everhour Reporting can display billable time, non-billable time, billable amount, cost, and other project details in customizable reports. Admins can group and filter those reports by member, task, project, client, and date range to review where revenue is coming from before invoicing.
Track approved billable work, exclude non-billable tasks, and send invoice-ready amounts to accounting tools. Everhour Billing & Invoicing keeps revenue tied to the time behind it.
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