Utilisation: How Much of Your Team's Time Do You Bill?

In any business that sells time, such as accountants, engineers, consultants, agencies or trades charged by the hour, revenue depends on how many hours are actually billed. Utilisation is the share of available hours that end up on an invoice. A few points of utilisation can be worth more than a price rise.

Available hours

Start with what each person could work in a year:

Working weeks are the weeks left after holiday. Most workers are entitled to 5.6 weeks' paid holiday a year, so a full-time employee works about 46 weeks.

Why 100% is the wrong target

Not every hour can be billed. People need time for training, internal meetings, quoting, admin and sales. Owners and managers also spend much of their time running the business. A realistic target depends on the role: a junior who only does client work can bill a much higher share than a director who also wins the work.

The useful question is not "why aren't we at 100%?" but "where do the unbilled hours go, and which of them could be removed, delegated or billed?"

Worked example

A four-person engineering consultancy:

• Available hours: 4 people × 37.5 hours × 46 weeks = 6,900 hours.
• Billed hours: each person bills 24 hours a week, so 4 × 24 × 46 = 4,416 hours.
• Utilisation: 4,416 ÷ 6,900 = 64%.
• Fee income at £65 an hour: £287,040.
• At a 75% target: 5,175 hours, or £336,375.

Reaching the target is worth £49,335 a year, and needs about 4.1 more billed hours per person per week, less than an hour a day.

Calculate your utilisation

Where unbilled hours usually go

• Unrecorded work. Short calls and emails to clients that are never put on a timesheet.
• Write-offs. Time recorded but not invoiced, often because the quote was too low.
• Admin. Tasks a cheaper person or a system could do.
• Rework. Correcting mistakes that were not charged.
• Waiting. Waiting for information from clients or colleagues.

Two weeks of careful time recording, split into billable, necessary non-billable and lost time, is usually enough to see the pattern. The time and motion study guide explains how to run an activity log.