The gift and the curse: non-billable time

Most firms have hours, days, weeks even, of non-billable time unceremoniously dumped into “admin” every month——or worse, not even recorded at all.

That could be hundreds of thousands of dollars of time on genuine, useful & essential “admin”… or not. Mostly likely “not”, to be honest.

Don’t get me wrong——tracking non-billable time as “admin” is a useful starting point on your journey to superior margins, but a common curse is that it often becomes the final destination.

Imagine: you’ve sold in the value of time management across the firm, so your team diligently record everything billable to projects, but then stick the remaining 10-50% (junior > senior) of their week in the “admin” dustbin. You still feel positive, because you can start to analyze utilization, project margin & staff availability (to a degree).

Not bad.

By doing that, though, the curse is cast because you tell yourself you’ll get on top of the admin bucket "later..."

"...once time-tracking has been fully adopted."

"...when our team grows."

...or whenever the next excuse you want to tell yourself occurs.

And it never, ever, happens.

If you break down non-billable time from this day forward, it’ll be the gift that keeps on giving.

There are, at least, 5 game-changing insights you'll gain:‍

1. Sales and new business are often a big suck of your most senior (& expensive) people’s time, so many firms commit resource & expense to building relationships, proposals, proof of concepts. ‘Cost of sale’ is often a huge hidden expense in PS firms, who are constantly working on RFPs or bids, so get a handle on which opportunities drive revenue & high margin work, which are a sunken cost, or which are just a complete waste of time.
2. Continued learning & development is crucial to your key employees, so ensure they track every internal & external training, mentoring session, company insights. That way, when it comes to their performance review, the hours of education your firm has provided is well-documented. And given you know their hourly rate, you can put a dollar value on what you’ve committed to their personal development.
3. Intellectual Capital (IC) is huge in PS firms——it’s the secret sauce in your delivery methodology, it’s the value creating documentation, a framework that delivers client results. Find out how much investment is being made into your IC, which feeds your pricing, your value proposition, or reveals it’s under-invested & needs TLC.
4. Marketing & personal brand will help drive referrals, inbound & your lead-gen machine. For most PS firms, that doesn’t mean huge spend on ad campaigns, but getting their people to tell client stories, share industry insight & therefore use their non-billable time in a productive way. Insight into the true cost of your webinar series, eBook, or in-person events is often startling.
5. Admin! After you’ve run a Work Breakdown Structure, you’ll be able to determine what “admin” actually constitutes (pro tip: changes for different people). Whether it's updating spreadsheets, creating reports, or filling in CRM records——this gives you a clear picture of which “admin” you should automate, outsource, rationalize etc.

Every PS firm is different, but the non-billable time gift is present for all firms to maximize. Avoiding the curse doesn’t have to be Founder-led——whoever wears your “Operations” hat in your firm should be tasked with driving this… but the benefits are huge for founders & your team.

This blog was originally published by Collective 54, a curated network of professional services founders and leaders.