Billable utilisation: the number every agency should watch weekly

Utilisation is the most quoted and most miscalculated number in agency management. Get the definition right and it predicts both your margin and your next burnout. Get it wrong and it just produces pressure.

The calculation

Billable utilisation = billable hours ÷ available hours. Available hours means contracted hours minus holiday, sick leave and public holidays — not a flat 40. If you divide by 40 for someone on holiday for two days, their utilisation looks terrible and the number tells you nothing.

Keep two figures per person: billable utilisation (client-billable work) and total utilisation (all tracked work, including internal projects and admin). The gap between them is where your overhead lives, and it is the single most actionable number in the report.

What a healthy target looks like

• Delivery staff: 70–80% billable. Above 85% sustained means no slack for sickness, rework or thinking.
• Senior/lead roles: 50–65%, because the rest is scoping, review and mentoring — real work that is not billable.
• Account and project management: 30–50%, depending on whether you bill PM time.
• Agency average across delivery: 65–75% is a well-run shop.

100% is not an aspiration, it is a warning. It means every hour is committed, so the first thing that goes wrong is absorbed by someone's evening.

The three ways the number lies

Timesheets filled in on Friday. Reconstructed time is rounded, guessed and biased toward whatever the person remembers. A running timer with idle detection produces a different — and much less flattering — picture. Fix the collection before you argue about the target.

Billable but not billed. Hours marked billable that never reach an invoice because they exceeded the fixed fee are a scope problem wearing a utilisation costume. Compare billable hours to invoiced hours monthly; the gap is your write-off rate.

Averages hiding the distribution. A team at 72% average can be four people at 95% and four at 50%. Always look at the per-person distribution, and look at the standard deviation over time — that is your rebalancing signal.

The weekly review that works

Fifteen minutes, same time every week. Look at four things: per-person billable utilisation for last week, anyone over 90% or under 50%, the write-off rate on invoices sent, and next week's committed hours against capacity. Act on exactly one thing. The value is in the cadence, not the depth.

Pair it with margin per client

Utilisation tells you whether people are busy. Margin per client tells you whether being busy was worth it. A client at 95% utilisation and 8% margin is a problem you cannot fix by working harder. Run both reports side by side and the uncomfortable conversations get much easier to prioritise.

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