Everhour keeps billable rates and tracked time connected, but accurate billing starts with clear capture rules.
Track billable vs. non-billable time and see your real utilization rate and revenue potential in seconds.
Working hours in the period
Admin, meetings, internal work
Industry average is 75–80%
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The practical question is simple: how much approved client work should be charged at the agreed rate? The answer starts with time entries, not invoice totals. You need the task, client or project, worker, date, billable status, rate, and any billing increment used by the engagement. Non-billable admin work, sales calls, internal meetings, and write-downs stay visible, but they do not increase the billable subtotal.
For U.S. billing, amounts are normally stated in U.S. dollars. The United States has no federal VAT/GST or single national sales-tax rate for billed professional time, so tax is a separate jurisdiction-specific input when a service is taxable. The billable-hours calculation itself answers the pre-tax labor value unless your contract or invoice template requires taxes, expenses, discounts, or retainers to be shown in the same summary.
The core formula is billable hours multiplied by the applicable billable rate. If a matter uses more than one rate, calculate each rate group separately, then add the subtotals. For example, a client research matter includes 28 approved strategy hours at $155 per hour and 19 approved production hours at $120 per hour. The billable labor value is $4,340 plus $2,280, for a total of $6,620 before taxes, expenses, discounts, or collection issues.
Rounding must happen before the final invoice total when your agreement uses billing increments. A six-minute increment equals 0.1 hour, while a 15-minute increment equals 0.25 hour. Record the actual time first, then round according to the engagement rule. Reconstructing time at the end of the week causes missed entries, duplicated entries, and rounded totals that do not match the work record.
Tracking billable hours is not the same as billing every worked hour. A good log separates billable time, non-billable time, written-down time, expenses, and invoiced time. This distinction protects utilization, realization, collection, and effective billing-rate reporting. Utilization compares billable time with total working time. Realization compares invoiced value with standard billable value. Collection compares paid amounts with invoiced amounts.
The common mistake is using one spreadsheet column called "hours" for every purpose. That hides whether time was not billable, not approved, written down, already invoiced, or unpaid. Track each entry with a billable flag and a rate source. For U.S. lawyers, ABA Model Rule 1.5 requires the scope of representation and the basis or rate of fees and expenses to be communicated in writing for new client-lawyer relationships, subject to the rule's limited low-cost exception.
A one-off calculation is enough when you need a quick invoice estimate, a quote check, or a single project subtotal. It is not enough when several people log time, different rates apply, entries need approval, clients expect detailed invoice backup, or management needs realization and profitability reports. At that point, the record matters as much as the arithmetic.
A managed workflow keeps the rate table, billable flag, approval status, and invoice handoff connected. Everhour supports cost and billable rates separately, with per-person defaults, per-project overrides, dated rate changes, and pricing by project, member, or task. That structure keeps current invoices accurate while preserving older calculations after a rate changes.
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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Each entry should include the date, client or project, task or matter, person, time worked, billable status, rate source, and description of the work. Add approval status when another person reviews time before billing. If your contract uses a billing increment, keep the original time record and apply the rounding rule consistently before invoicing.
Group approved billable entries by rate, multiply each group by its rate, then add the subtotals. Do not average the rates before multiplying unless the contract uses a blended rate. For example, partner, manager, and analyst time should stay in separate rate groups when each role has its own agreed billing rate.
Billable hours are approved work entries that can be charged to the client under the agreement. Invoiced hours are the portion actually placed on an invoice. They can differ because of write-downs, fixed-fee caps, courtesy discounts, disputed entries, or timing when some approved work has not been invoiced yet.
Track non-billable work separately instead of deleting it. Non-billable entries show the full cost of serving the client, support utilization reporting, and explain why total worked time is higher than invoiced time. Common non-billable categories include internal admin, training, business development, rework outside the client agreement, and excluded project tasks.
Track billable labor before tax, then apply tax only when the service and jurisdiction require it. The United States has no federal VAT/GST or national sales-tax rate. State and local treatment controls, and some services are taxable in some places but not others. Keep the tax input separate from hours and rates.
Everhour separates internal cost rates from client-facing billable rates, so reports can calculate labor cost, revenue, and profit. Teams can set per-person defaults, override rates by project, preserve dated rate history, and price billable work by project, member, or task.
Everhour can turn tracked billable time and expenses into invoices, with amounts calculated from rates, time, and billable expenses while excluding non-billable work. Invoice data can be grouped by project, task, person, date, or another available breakdown before export to QuickBooks Online, Xero, or FreshBooks.
Keep rates, approvals, and invoice totals aligned from the first time entry. Everhour connects billable-rate setup to tracked work, reporting, and invoicing for cleaner client billing.
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