Billing a Client From Recorded Time

Where time is billed, the timesheet is a commercial document and the terms of engagement are its specification. Most people recording time have never read those terms, and most timesheet configurations do not encode them.

The destination examined in “Billing a Client From Recorded Time” determines how strong the underlying time record must be. For teams researching self report bias, read the provider overview can connect hours with projects and reports, provided codes, approvals, exports and retention are designed for the actual payroll, billing, funding or accounting decision.

The gap is absorbed as write-off: hours worked, recorded, and removed before the invoice goes out because they would not survive the client's reading. It is a real cost, it is measured, and it is almost never traced back to the recording process that caused it.

For a separate benchmark relevant to “Billing a Client From Recorded Time”, consult the ICAEW audit resources. Use it to test record quality, approvals, retention, employee rights and exception handling against the real workflow rather than treating a software report as self-explanatory evidence.

What the terms usually specify

The increment: six minutes, a quarter hour, or actual time. The system should round the same way; frequently it does not.

Who may be billed and at what rate, which creates a problem when work is done by somebody not on the rate card.

What is excluded. Internal administration, file management, time spent on the firm's own processes, travel in some agreements and not others, training, and supervision of junior staff are the common exclusions.

Narrative requirements, which in institutional and insurer work can be prescriptive down to the format.

Caps, estimates and budget notification duties: an obligation to warn before exceeding an agreed figure, which depends on somebody watching recorded time against the estimate in near real time.

Where time becomes unbillable

Three ways, in increasing order of annoyance.

Excluded by the terms. Nothing to be done; the fix is to code it correctly at the point of entry so it never looks billable and never appears in a realisation figure as a failure.

Unexplainable. The hours were billable and the narrative does not support them. This is the largest category and the one most completely within the organisation's control.

Over budget or unauthorised. Work done beyond an agreed cap, or on a matter without a live engagement. The record is fine; the commercial position is not, and that is a matter-management failure that the timesheet merely reveals.

The write-off conversation

Decided, in most firms, by one person under time pressure at the point of invoicing, with no record of the reason.

Capturing the reason — in a field, from a short list — converts the write-off from a cost into a diagnostic. Four categories are enough: excluded activity, inadequate narrative, over budget, commercial decision. A quarter of data with reasons tells you precisely where to intervene, and the distribution is usually surprising.

Unbilled time that should be visible

Time recorded against non-chargeable codes is where a professional firm's real costs sit, and it is routinely treated as residual rather than measured.

Business development, internal projects, supervision, recruitment, training. Each is a legitimate investment and each is invisible if the code list treats everything non-billable as one bucket. A short, deliberate list of non-chargeable categories gives the firm a view of where its unbilled capacity goes, which is usually the more interesting question.

Realisation as a measure of people

The common failure. Realisation — billed over recorded — is attributed to individuals and used in appraisal, and it is substantially determined by the matter, the client, the pricing and the partner's write-off decisions.

A junior on a fixed-fee matter that overran has a poor realisation figure and no influence over any of the causes. Using it as a performance measure produces one reliable behaviour, which is recording fewer hours, and that is the outcome least useful to the firm.

What to configure

Round as the terms require, at the latest point. Mark codes with their billability so the person sees it at entry. Require narratives on billable codes only. Show recorded time against the budget to whoever owns the matter, continuously rather than at invoice. And feed write-off reasons back to the teams that generated them, which is the one step that changes what gets recorded next month.

Fixed fees, and why the time still matters

Under a fixed fee the recorded hours do not determine the invoice, and recording discipline collapses accordingly. The firm then has no idea what the work cost, which is the one thing a fixed fee makes essential to know.

The hours on a fixed-fee matter are the input to the next price, the evidence in any scope dispute, and the only way to tell a profitable arrangement from a loss. They should be recorded to the same standard as billable time and reported separately, because a firm moving towards fixed pricing without that data is pricing from memory and will find out slowly.