Client Budget Utilization: When to Bill Again?

If you are offering services for a set block of time at a set hourly rate tracking the amount of each client’s budget that has been utilized is one of your most important metrics.  Just to clarify this lets use an example:

Bob’s Web Design allows clients to hire dedicated coders for 10 hours blocks of time at $10/hr.  A 10 hour block of time costs $100.  Bob’s gets paid, the coder starts working and keeping track of hours in a time tracking app (possibly Allinvoice).  After 5 hours the utilization is at 50%, after 9 hours it is at 90%.

As a business manager you need to make some decisions based on utilization.  The first is when are you going to reach out to the client about rebilling if this could be an ongoing project.  The second is if you don’t hear from them by the time utilization is at 100%, are you going to stop working.  Each of these decisions will be different and depend on your business model.

If you are rebilling clients for multiple work cycles be aware that with most time tracking application the utilization rate will be based off of the total amount billed to the client.  With Allinvoice we have made our utilization formula based on the account balance at the most recent paid invoice.  This gives a clearer view of where each client stands, and gives your billing department a better feel for account balances and future staffing.


No comments yet.

Leave a Reply