What is Billability?
Billability in project management and professional services refers to the percentage of time an employee spends on tasks that can be billed to a client. It’s a measure of how much of someone’s work directly generates revenue, usually tracked in hours or as a percentage of total available working time.
For example, if a consultant works 40 hours in a week but only 30 of those hours are tied to client projects, their billability rate is 75%. The other 10 hours might go toward internal meetings, training, or administrative work, which are necessary but not billable.
High billability rates often indicate efficiency and profitability, but they shouldn’t be the sole focus. Overemphasis on billable hours can lead to burnout and leave little time for training, innovation, or internal improvements. Many organizations aim to strike a balance, setting realistic billability targets while still allowing space for professional growth and team development.
Tracking billability helps managers forecast revenue, plan workloads, and understand how resources are being used. It also highlights whether staffing levels are aligned with project demand or if more resources are needed.