Utilisation is the ratio that governs a professional services business: billable hours divided by hours worked. Thirty billable hours in a 42-hour week is 71.4% utilisation, and the 12 hours that did not reach a client invoice are the real cost of admin, business development and internal meetings.
The figure that surprises people is what those non-billable hours are worth. At 120 per hour, 12 unbilled hours a week is 1,440 of forgone fee income, and across 46 chargeable weeks it is 66,240 — usually far more than the cost of fixing whatever is consuming the time.
The write-off rate is applied after billable hours are counted, because logged and invoiced are not the same thing. Hours reduced during billing review never reach the invoice, so a realistic write-off assumption gives a fee figure that matches what is actually collected.
The formula
W- Hours worked
B- Billable hours logged
r- Charge-out rate
w- Write-off rate applied at billing
How it works, step by step
- Enter the total hours worked in the week.
- Enter how many of those were billable to a client.
- Enter your charge-out rate per hour.
- Set the proportion of logged time typically written off at billing.
Worked examples
30 billable hours in a 42-hour week
Utilisation is 30 ÷ 42 = 71.4%. After an 8% write-off, 27.6 hours are invoiced at 120, giving 3312.00 for the week and 152352.00 across 46 chargeable weeks.
What five more billable hours are worth
Moving from 30 to 35 billable hours lifts utilisation to 83.3% and adds 552.00 a week — 25392.00 a year — without any change to hours worked. The effective yield per hour worked rises from 78.86 to 92.00.
How to read your score
Frequently asked questions
What counts as a billable hour?
Time recorded against a client matter that will appear on an invoice. Internal meetings, training, business development and administration are worked hours but not billable ones.
What utilisation should I aim for?
Most professional services firms target 65% to 80% for fee earners. Above 90% leaves no capacity for the non-billable work that generates future fees, and it is rarely sustainable.
Why apply a write-off rate?
Because logged hours and invoiced hours differ. Time is routinely reduced at billing review, so assuming every logged hour is invoiced overstates income by that margin.
Is the effective yield the same as the charge-out rate?
No, and the gap is the point. The yield spreads fee income across every hour worked, so it falls as utilisation falls or write-offs rise. It is the figure that actually covers overheads.
Utilisation reference
| Billable h | Worked h | Utilisation | Invoiced h | Weekly fee | Yield per hour worked |
|---|---|---|---|---|---|
| 20 | 42 | 47.6% | 18.4 | 2208.00 | 52.57 |
| 25 | 42 | 59.5% | 23.0 | 2760.00 | 65.71 |
| 28 | 42 | 66.7% | 25.8 | 3091.20 | 73.60 |
| 30 | 42 | 71.4% | 27.6 | 3312.00 | 78.86 |
| 33 | 42 | 78.6% | 30.4 | 3643.20 | 86.74 |
| 35 | 42 | 83.3% | 32.2 | 3864.00 | 92.00 |
| 38 | 42 | 90.5% | 35.0 | 4195.20 | 99.89 |
Invoiced hours are the billable figure less an 8% write-off applied at billing review.