How many billable hours do you write off?

A new survey came out last month – the Trends & Challenges in Architecture and Engineering International Report 2014* and it had some most interesting (but perhaps not surprising) statistics.

Architecture and Engineering firms throughout Australia and New Zealand are missing out on invoicing up to 30 percent of billable hours. According to the survey, almost three quarters of businesses indicated they recovered only 61-80 % of billable hours.

Loss of billable hours is a common challenge for all time based billing professionals, regardless of whether you bill on the basis of time engaged or a fixed price contract. It’s a challenge that needs to be constantly managed.

The report highlighted that project profitability is seen as one of the industry’s biggest issues. But a surprising result from the survey was that despite the businesses surveyed managing to invoice for an average of only 70% of billable hours, few firms were willing to acknowledge this as an area that needed improvements. Most businesses said their focus was on winning new projects and customer satisfaction.

Now we’d agree that these are very important business issues, but with an average 30% leakage on billable projects, what about identifying and preventing project profitability problems?! Let’s do some simple maths. A 30% write off on billable time = $70 recovered for every $100 earned. An increase in recoveries of 25% = (70% x 1.25) = 87.5%. That’s still down a bit, but assuming you’re making money even with a 30% write off, the extra 25% recovery goes straight to the bottom line. Wow!

And here’s some great news. We know that Abtrac users aren’t all average Architecture and Engineering firms. In fact in all professions using Abtrac, you’re much better than average. Taken by permissions from a sample of our Abtrac clients we found that 2 out of 3 Abtrac firms only write-off between 7%-12%. On either tail of the distribution some of you often write-on and admittedly some write-off more than 12%. But only one wrote off over 25%.

That’s a much healthier number.

We’re proud you’ve chosen Abtrac for your time management and invoicing software. It works.

If you want a single area to look at further then read on.

With Abtrac you have a number of tools at your disposal to maximize project profitability, employee productivity. Abtrac helps minimize write offs. It’s that simple. Some of them you probably use Abtrac for this purpose every day without even noticing. Others might need a little conscious input to yield some big results.

As well as looking at how much was billed each month end we recommend you look at your write off percentages. Use one of the WIP reports from Performance Reports > Management Analysis:

  • WIP Write-offs and Write-ons by Invoice
  • WIP Write-offs and Write-ons by Project, or
  • Write-offs and Write-ons by Project and Invoice are all good places to start.

The WIP Write Ons and Write Offs reports show data between two dates, and the write on/off percentage. They’re a nice quick check to see ‘how you are doing’ and address any issues before they reach 30% or more!

WIP WriteOnsOffs

If you’d like to talk to someone at Abtrac about reports to better manage your write off numbers or productivity in general, give us a call. We’ll be happy to help.

*And if you are interested there is a nice summary of the Trends & Challenges in Architecture and Engineering International Report 2014 by Andrew Heaton here at

Abtrac KB# 2031