What are billable hours and why they are so important?

Since we founded Thread Solutions, we sometimes have had discussions with our clients when working under Time and Material statements of work about the fact that we, at the end of the month, are used to add to the invoice all those billable hours employed in the realization of their project.

For this reason, today I will give you my point of view and I will try to show you the other side of the medal, hoping that you will agree with me on the importance of labeling all necessary hours as "billable" for the success of the project.

This problem is happening especially with small customers, or customers with small or not very skilled IT professionals. This seldom happens with the enterprise customers we also work with, because in my opinion, we share with these customers a similar manner of working and professionalism compared to smaller customers of ours, which have less experience in complex projects. 

Usually, we add a report to the invoice we send to our clients so that they have a clear understanding of what we have done for them. It is not easy to translate the tasks from the internal language of the team of Solutors to something that the customer is able to understand, and this is where the discussions mostly start from.
Let’s take for example the case of bugs and meetings that are also the majority of the tracked hours that the customer is more often arguing when reviewing our report.

What is billable time?

Before describing our situation, I want to clarify what billable time means.

Any time spent working on tasks that are directly related to the achievement of the goal inside the scope of work that the customer engaged us for, is considered billable time. 

The list of the following activities apply:

• doing actual work towards completing the project
• project planning
• developing project timelines
• conducting research for solutions to overcome difficulties
• attending meetings
• reading and responding to work emails or messages (via Slack, Whatsapp, Hangout, Teams, and whatever we agree to use to communicate)
• revising work submitted to the client, at the client’s request

When we get into discussions, the common scenario we face is that the client is willing to pay only for the hours we dedicated on performing actual work towards completing the job, and not for all those activities (that are also essential) needed to solve or revise something regarding the project. All these activities are necessary to do a good job, it is obvious that if we don’t spend the required time on these activities too, the job cannot be done.

It is crucial to make clients understand how important these hours are and why they should pay us for this commitment, but we sometimes struggle to state it clearly.