Billable Hours

Milhaus

When you talk about billable/non-billable hours, what types of things do you consider non-billable?

In my thinking, most everything should be tied to a particular job? I interpret it to mean down times in between jobs, travel time in certain instances?

mark

Chris Johnson

Non billable....Chris suppose to be doing books and records but, surfing CT

Billable to me...on the job/daytime hours dealing with the job, etc.

__________________
Chris

mdshunk

Waiting to be dispatched, restocking and cleaning truck, making repairs to shop building, attending a training class, warranty work, and waiting while you're getting an oil change are some examples of non-billable hours.

Mike Finley

YEah like MD said.

Especially useful if you are trying to do job costing. The non-billable hours need to be accounted for as an expense no different then the phone bill. If you are billing them to customers you're throwing off your real numbers.

mahlere

the way we use them...

Billable - any time on a specific job site (we may also add shop time if we are doing pre-fab work)

Non-Billable - office work, travel time, the items MD listed, getting material...etc..

but this is mostly for service/jobbing type work

mdshunk

In larger outfits, there are entire jobs titles that are non-billable in nature. Warehousemen, tool crib attendants, parts runners, secretaries, janitors, etc. These types of folks are just "overhead".

mahlere

Yep...and my goal in life is to become 100% overhead

Tiger

I calculate billable time port to port. Is it typically calculated without travel, setup and cleanup? I feel like I'm mixing productive and non-productive hours.

Dave

Milhaus

Do you guys calculate this based on history? I currently figure on 35 hours per week billable. That allows 1 hr per day in the normal week, for non-billable. I'm didn't track this last year, so I'm taking a stab at it based on what I have read.

mark

mahlere

dave,

for your purposes...only count on site...this will include set up/clean up, but not travel...this will give you a clearer picture of how many hours you actually work...and what you need to set you pricing guide rate to..

mahlere

just track for the next month...i think you'll find that the real numbers are something like 2-3 hours non-billable, for every 5-6 hrs billable...

Mike Finley

I would say it all depends. What's your purpose for tracking billable and non-billable. Set up and clean up are certainly billable hours the way we do it. Travel time depends, is it a worker driving to a single job site for the day from his house? Is it from the shop? Is it from one site to another during the same day?

Unless you are on a T&M project tracking this stuff is soley for job costing as far as I'm concerned, which is for internal uses.


For me it's actual hours. We do time cards broken down to customer name so we can assign billiable hours. If a guy puts in 6 hours on customer A on Monday and then goes over to customer B for 2 hours that day to do something, we would assign 6 hours to customer A and 2 to customer B.

Milhaus

Mike,

The reason I'm interested in this is for job costing; to know exactly what goes into each project and to make sure that my rates are where they should be. I'm not interested in losing money continually.

Set-up and clean-up are billable hours the way that I do it too. Drive time to one job each day is non-billable. Drive time in between job site should be non-billable too. So I need to account for that.

I need to track this with more accuracy I think.

mark

Tiger

Right Mike. Mahlere knows I'm in residential service doing flat rate. It's all for price calculations, not client billing.

Dave

Double-A

Dave, be sure to track actual time and not the average time allowed by task number.

Its possible to spend all day at a home and accumulate 8-10 hours of task time, but only have 7 hours at the home. You'd want to use the 7 hours for doing non-billable calculations.

Port to port hours should be considered non-billable if you are not charging a dispatch/diagnostic fee that will cover your costs/markup/profit on that time averaged out over all the jobs you do.

If your first task has this number built into it, or you collect enough for this time to cover costs/markup/profit, then consider them billable.

Hope that helps

__________________
"My clients’ wishes are the center of my attention." -- David Guido, a contractor in Woodstock, N.Y.
New York Times, July 20, 2006

mdshunk

I was going to add to that list that nothing the boss's son ever does, whether on the jobsite or off, is billable. At least it shouldn't be, since no real work comes out of the boss's son.

Tiger

I talked with a plumber a few years ago regarding a commercial job we were on. He said when you take into account all the trips to the truck and breaks you were lucky to get 6 1/2 hours productive work in. As a small shop I get 3-7 hours work in. Occasionally some of the work is similar to new construction, but average is in the 4-5 hour range without travel.

Dave