Billability

Billability is the share of recorded work that can actually be charged to a client. It is calculated by dividing billable hours by total recorded hours for a period. It answers a different question from utilization: not how busy people were, but how much of that work the business can invoice.

How is billability calculated?

Billable hours divided by total recorded hours. If a team records 1,200 hours in a month and 870 of them carry a billable flag, billability is 72.5 per cent. The figure can be read per person, per project, per client or per service line.

Why does billability matter?

Because recorded is not the same as billed. Hours lost to rework, to scope that was never agreed, or to a fixed fee that has already been exhausted still cost the same to produce. Billability makes that gap a number rather than a feeling at the end of the quarter.

What is the difference between billability and utilization rate?

Utilization compares billable hours to available hours. Billability compares billable hours to recorded hours. A team can be fully utilized and still have poor billability if much of what it does cannot be charged. Utilization says how busy people were. Billability says how much of that work the business can invoice.

How is billability improved?

Usually not by working more. The levers are recording hours where the work happens so nothing is lost, agreeing scope changes before they are delivered, and pricing from what comparable work really took rather than from what it was hoped to take.

In troi every entry carries a billable flag. See time tracking.