Billable Hours
Agency glossary · Updated July 2026
Definition
Billable hours are the hours a team member spends on work that can be charged to a client, as opposed to internal, administrative, or business-development time. They are the numerator of utilization and the raw material an agency converts into revenue.
Why it matters
Only billable hours earn money, so tracking them accurately is the foundation of utilization, effective rate, and per-project profitability. Under-recording billable time quietly understates how profitable your work really is.
Watch for
Revisions, coordination, and over-servicing are real hours that often go untracked. Capturing them is what makes your effective-rate and realization numbers honest.
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