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What is Billable Capacity?

Billable Capacity Explained

Billable work is any work done for a client that they will be billed for. Along these lines, “billable capacity” is the amount of time a staffer is available to do billable work.  Billable capacity is measured in three different ways: FTE (full-time equivalent), hours, or minutes. It takes into account national holidays, approved time-off and assignments with the "utilization affects billable capacity" checkbox checked.

 

Non-Billable Capacity Explained

If billable capacity is a staffer's availability to work on billable tasks, then “non-billable capacity” describes their  availability to complete work that client’s won’t be charged for. Non-billable capacity may be marked as an assignment in a non-billable project and may account for training hours, team management, or other internal work.

When staffers track time or activities on projects marked as “non-billable”, then those projects’ clients won’t be billed for that work. You’ll also see the term “non-billable utilization”, which stands for the amount of time a staffer is committed to work on non-billable or internal projects.

 

Changing Calculations With “Reduce Billable Capacity” and “Use Leftover Capacity”

When editing  an assignment, you have two options to choose from:  “reduce billable capacity” and “use leftover capacity”. 

Let’s look at an example of these options in action. Our staffer Obi is a project manager. We want to allocate time in his calendar for internal activities: one-on-one meetings, management meetings, and development. We plan our budget for these activities in advance for the entire year. We assign him to an internal, non-billable project, and plan his work on these internal assignments for 20 hours a month. Even though we won’t make money from these assignments, the work she does is necessary  to manage other people's work on billable projects efficiently. To account for this work in Obi's schedule, check the “utilization affects billable capacity” checkbox in his assignment details. In this way, we reduce his capacity (the amount of time that Obi can devote to billable projects) each month. These 20 hours are thus firmly logged into Obi's calendar. You can recognize projects like this one by the stripes. 

Now, let’s say that from March to May, Obi will be working on a client project. If we log his capacity at 100 percent, she will always end up being overbooked by 20 hours each month. To avoid this, we’ll select “use leftover capacity” when creating his next assignments. In other words: we tell the calendar to "take what's left."

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