A recent survey by Tribes.AI has found that missing or inaccurate timesheets cost businesses $63,807 per employee per year or $7.49 billion daily for the professional services sector providers in the US.
Management Perception of Lost Billable Time by Industry
The survey was based on government figures combined with a recent Tribes.AI survey of over 1,200 managers in the sector. A whopping 90.5% of them agree that billable hours are missing and estimate the loss at an average of 21.5%. The staggering statistics indicate that close to one in every five billable hours are not recorded.
The survey canvased businesses in three countries, the US, Australia, and the United Kingdom which have a combined workforce of 55.6 million distributed across 4.7 million businesses. Across the three nations, professional services sectors lose a staggering amount of revenue every day. This comes out to $ 7.49 billion in the USA; $1.26 billion in the UK; and $377 million in Australia over inaccurate timesheets.
Management perception of lost billable hours is very close to the 21.5% average in all three countries. However, the resulting estimated revenue loss per employee per year differs from country to country due to differences in average hours worked in a year.
According to the managers surveyed in the report, the industries that lose the most billable hours in the US are ranked as follows:
- Website and hosting service providers show the highest perception of lost billable hours according to managers at 9%. This is closely followed by lawyers and legal services with 27.6% of managers believing loss in earnings due to missing or inaccurate timesheets.
- These are followed by construction and engineering (24.1%), advertising and marketing (23.4%), real estate (21.4%), and banking and insurance (21.3%).
- Businesses engaged in software, IT, and support (19.9%); consulting and accounting (19.8%); and photo, film, and video production (19.2%) came below the global average of (21.7%).
The US displays a much higher perception of lost billable hours across industries in general. Advertising and marketing businesses are the only exceptions were managers in the UK seem to perceive lost billable time as a much bigger challenge.
What Are Billable Hours and How to Keep Track of Time
With average senior staff hourly rates at $244 and junior hourly rates averaging $211, accurately tracking time spent remains a huge challenge for teams in the professional services sector and could potentially lead to losses in revenues.
Despite the use of manual timesheets, a significant amount of billable work remains untracked, costing companies billions of dollars in revenue. Nine out of 10 managers surveyed say that accurate timesheet data would increase revenue. Managers in the US are the most optimistic, projecting a 31.1% revenue increase from accurate timesheets. Australian managers come a close second with 28.4%, followed by the UK with a 25.7% projected revenue increase.
Billable hours are the amount of time spent working on business projects that can be charged to a client according to an agreed hourly rate. Businesses, agencies, entrepreneurs, and consultants frequently use billable hours to charge clients for the services they provide. To charge by the billable hour, businesses need to track the amount of time they spend on each client’s projects every day.
Besides setting your hourly rate you will need to determine an invoicing schedule. Once you accomplish this you will need to create a time log to track your billable hours based on the particular client. This can be done using a spreadsheet, if you find the task of manually filling timesheets is time-consuming, you can also opt to track your billable hours digitally by soliciting the services of cloud-based accounting solutions.
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