Table of Contents
Explaining Billable Capacity
Explaining Non-Billable Capacity
Understanding "Reduce Billable Capacity" and "Use Leftover Capacity" in Calculations
What is "Reduce Billable Capacity"?
What is "Use Leftover Capacity"?
How They Work Together
Key Benefits
Tutorial: Explaining Billable Capacity And Leftover Capacity
Practical Example: Altering Calculations with “Reduce Billable Capacity” and “Use Leftover Capacity”
Explaining Billable Capacity
Billable work is any work done for a client that will be billed. 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.
Explaining Non-Billable Capacity
If billable capacity is a staffer's availability to work on billable tasks, then “non-billable capacity” describes their availability to complete work for which clients won’t be charged. 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 means the amount of time a staffer is committed to work on non-billable or internal projects.
Understanding "Reduce Billable Capacity" and "Use Leftover Capacity" in Calculations
When managing assignments in Foresight, features such as Reduce Billable Capacity and Use Leftover Capacity are designed to help you effectively allocate resources and prevent overbooking. Below is a step-by-step guide to understanding and applying these options:
What is "Reduce Billable Capacity"?
This option reduces team members' capacity for billable projects by reserving time for non-billable or internal work. For example:
- Suppose an employee is assigned 20 monthly hours to an internal, non-billable project. In that case, selecting Reduce Billable Capacity ensures these hours are deducted from their total capacity, leaving the remaining time for billable work.
- This ensures that the non-billable work is prioritized and accounted for in capacity planning.
When to use it?
- Assigning resources to internal activities like team meetings, training, or admin tasks.
- Reserving time for fixed non-billable tasks to avoid scheduling conflicts with billable projects.
What is "Use Leftover Capacity"?
This option allocates only the remaining unused hours of a staff member’s capacity to a specific project. Considering other existing commitments, it ensures the assignment doesn’t exceed the team member’s available time.
For example:
- If an employee has already been assigned to a high-priority project taking up 60% of their time, using Use Leftover Capacity on a secondary assignment automatically schedules only 40% of their availability.
- This prevents overbooking while efficiently utilizing the available capacity.
When to use it?
- Assigning lower-priority projects or tasks without risking overallocation.
- Balancing workloads by using only the uncommitted time of team members.
How They Work Together
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"Reduce Billable Capacity" Example:
An employee is assigned 10 hours per week to internal work (non-billable). This assignment reduces their availability for billable projects by 10 hours, ensuring the calendar reflects accurate availability for client work.
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"Use Leftover Capacity" Example:
After assigning non-billable hours, an employee has 20 hours remaining in their capacity. A client project is then assigned using the Use Leftover Capacity option, automatically limiting the assignment to 20 hours.
Key Benefits
- Prevents overbooking of resources by managing capacity accurately.
- Enables prioritization of critical assignments (billable or non-billable).
- Enhances forecasting accuracy for project planning and workload management.
By understanding and applying Reduce Billable Capacity and Use Leftover Capacity, you can optimize your resource allocation, maintain balanced workloads, and ensure efficient project execution while aligning with your business priorities.
Tutorial: Explaining Billable Capacity And Leftover Capacity
Practical Example: Altering Calculations with “Reduce Billable Capacity” and “Use Leftover Capacity”
When editing an assignment, you have two options: “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 be 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."