Billable vs Non‑Billable Hours: How Much Money Are You Leaving on the Table?
Hours are the unit of sale in an agency, yet nearly half of agencies cannot tell which are billable.
COR Marketing & Advertising Trends 2024
Creative and digital agencies thrive, or struggle, based on how effectively they turn talent hours into client revenue. Forty‑two percent of agencies admit they do not know how many of their team’s hours are billable versus internal (Marketing & advertising trends 2024 - Billable hours - COR).
Professional‑services firms worldwide lose an estimated $553 billion in annual revenue to untracked or non‑billable work (Why Poor Time Tracking Is Costing You Billable Revenue | Cloud Coach).
In this guide you will learn:
- Clear definitions of billable and non‑billable hours with agency examples
- Data on how hidden non‑billable work erodes profit
- A quick calculator to estimate your own revenue leakage
- Six tactics to shrink non‑billable overhead without burning out your team
- How Remotinio’s project and sub‑project structure captures billable time in seconds
Need a primer on logging time? See How to Track Time.
1. Billable vs Non‑Billable: Simple Definitions
| Term | Meaning | Agency examples |
|---|---|---|
| Billable hours | Work invoiced to a client at an agreed rate. | Designing a landing page, coding a feature, writing ad copy, SEO audits |
| Non‑billable hours | Work that supports the business or client relationship but is not charged directly. | Internal meetings, proposal writing, new‑business pitches, training, admin, minor out‑of‑scope tweaks |
Non‑billable time is not evil, however without clear boundaries it expands to fill every gap.
2. Where Non‑Billable Hours Hide (and How Big the Leak Is)
- Forty‑two percent of agencies lack visibility into their billable versus non‑billable split (COR, 2024)
- Analysts estimate one in five professional‑services hours go unbilled, worth $553 billion each year (Cloud Coach, 2024)
- HubSpot’s Agency Pricing & Financials Report shows the median agency bills 60 percent of staff hours, while top performers bill 75 percent (Hubspot The Agency Pricing & Financials Reports).
Quick revenue‑leak calculator
Potential revenue = total-staff-hours × billable-rate
Actual revenue = (billable-percent ÷ 100) × potential-revenue
Leakage = potential-revenue − actual-revenue
If a 30‑person shop averages $150 per hour and 1 600 workable hours per person per year:
Potential revenue = 30 × 1 600 × 150 = $7 200 000
Actual at 60 % = $4 320 000
Leakage = $2 880 000
Cutting non‑billable time by five points would reclaim $360 000.
3. Why Non‑Billable Overhead Bloats
- Scope creep disguised as “quick tweaks”
- Over‑servicing anxious clients
- Internal meetings without agendas or timeboxes
- Admin double entry (copying data between tools)
- Hand‑off confusion between teams, causing rework
Low weekly utilization is an early warning sign. For details see Utilization Rate 101.
4. Six Tactics to Turn Non‑Billable Hours Into Billable Value
| Tactic | How it works | Quick win |
|---|---|---|
| Track at task level | Remotinio lets you add sub‑projects down to a single task, so you see exactly where each non‑billable hour hides | Flag scope‑creep tasks on the next status call |
| Set a non‑billable budget | Cap internal work at 15 percent of weekly hours | Use an “Internal” tag to watch the cap live |
| Package repeat favors | Convert popular “free” tweaks into a paid add‑on tier | Pitch a mini‑retainer during the next QBR |
| Automate admin | Use Remotinio's flexible reporting and up-to-date data and import it into your invoicing tool. | Save two admin hours per PM each month |
| Time‑box meetings | Default calendar blocks to 25 or 50 minutes, track under an “Internal Ops” tag | Cut meeting hours by 20 percent next sprint |
| Re‑scope early | Weekly budget‑vs‑actual snapshots highlight overruns while there is still time to adjust scope or budget | Prevent one over‑run this quarter for instant ROI |
5. Case Example: Turning “Free” Edits Into Paid Scope
A content agency saw copywriters logging eight to ten non‑billable hours per week on “quick tweaks”. After tracking those edits as a sub‑project in Remotinio, they discovered 480 unbilled hours per year, worth $72 000.
They introduced a “Priority Edits” add‑on package at $600 per month. Three clients subscribed, generating $21 600 in new annual revenue and reducing overtime.
6. Billable vs Non‑Billable FAQ
Is zero non‑billable time realistic?
No. Internal work is essential. The goal is controlled, intentional non‑billable time.
What is a healthy non‑billable percentage?
Top agencies keep non‑billable work between 15 and 25 percent of total hours.
Should we bill for internal meetings on client projects?
Only if the meeting advances client value and the contract allows it. Otherwise track it as non‑billable for transparency.
How does Remotinio help?
Granular sub‑projects capture each task, logging takes seconds, and weekly insight reports reveal billable versus non‑billable trends so you can act quickly.
7. Next Steps
- Audit last week’s timesheets for Internal, Admin, or Scope Creep labels
- Set a non‑billable budget for the coming sprint
- Use Remotinio to track sub‑projects, ensuring no hour hides under “miscellaneous work”
Ready to see the split live and plug the leaks? Start a free 14‑day Remotinio trial now, no credit card required.