Billable time is the amount of time that has been invoiced or billed to a customer. Labor such as sales, warranty, unbilled support, service department cleanup, driving time that is not reimbursed, and other overhead labor, is not invoiced or billed. This unbilled labor must be kept to a minimum to make a service
Managing a service company or division requires affective tools to measure the efficiency of labor and employees. Comparing billable time to the actual time is a powerful way to evaluate the profitability of individual employees or an entire service department. The task module of EBMS can help answer some of the following questions:
What percentage of an employee’s time is being billed?
Is a sufficient amount of time allocated to a task to cover overhead labor costs such as scheduling, driving (for on site projects), management, and other labor that is not billed.
Is the employee completing enough of tasks to be profitable?
The following types of businesses find that labor management is very important element in managing the profitability of the company.
General services that are labor intensive
Repairs and maintenance
Professional services
Time & Material (T&M) services
Smaller custom manufacturing tasks (The job Costing option of EBMS is a tool that can be used to manage labor within individual larger projects)
The following settings are important settings when tracking billable time.
The Billable Time setting within the work code record should be set accordingly. Select Payroll > Work Codes from the main EBMS menu to open the work code dialog as shown below:
Enable the Billable Time option for all labor that is invoiced. All service labor including time and materials (T&M) or labor done based on a contact should have this option enabled. Payroll work codes such as clerical, sales, cleanup, or other overhead work codes should have the Billable Time disabled.
The Billable Time found within the Billing tab of the task is an important entry to properly evaluate billable time.
The Actual Time is calculated from the time entered into the Time tab. Review the Time and Material tasks vs. Contract Tasks section for an overview on how billable time is recorded.
A variety of reports are available to evaluate billable time within the EBMS software. Select File > Reports from the main EBMS menu. Select Tasks > Billable Time from the menu.
The Employee Billable Hours report appears as follows:
The following report compares hours for each invoice:
There are many additional reports that allow the manager to evaluate billable time.