For agency owners and executives, it can seem like there are never enough hours in the day — or, more accurately, enough billable hours.
But why is this the case? Of course there’s the constant pressure to bill more in order to cover your expenses and keep your doors open. But more than that, there’s the sneaking suspicion that you’re missing out on opportunities to increase your revenue while serving your clients more effectively.
In this post, we’ll dive into some simple, ethical ways to increase your billable hours. You’ll be amazed by how much time you actually have!
Billable hours refer to any time spent on activities related to a client that you are able to charge for. In other words, billable hours are the activities that generate revenue for your agency. What is considered “billable” can vary from one funder to another, and even from one service to another for the same funder.
For example, calling an individual from your desk might be billable for case management services in one state. Other times, it may not be billable. It all depends on how the funder defines billable activities for each service.
Non-billable hours are the essential tasks your agency must perform, but that you can’t directly bill and get paid for. This includes things like driving to appointments, attending training, and participating in meetings not related to a specific client.
No matter how hard you try, some of your agency’s work will always be non-billable. However, agencies aiming to boost their revenue will want to find ways to increase their billable hours and reduce their non-billable hours. Let’s look at some ideas for how to do that now.
1. Track all of your time — billable or not
2. Record your hours as you go
3. Pay attention to rounding rules
4. Streamline administrative tasks
5. Cut down on travel with virtual services
6. Keep a closer eye on your authorizations
If you’re trying to increase billable hours and reduce non-billable hours, you first need to know how much of the workday your team is actually spending on each type of activity. Start by having your staff jot down everything they do throughout their day and how much time it takes (billable or not). Searching for files, correcting documentation, even phone calls and interruptions — have them write it all down.
After a week or two of tracking, you’ll have a good feel for how much of your staff’s time is going toward non-billable tasks. For example, you might be surprised by the number of hours that are gobbled up by wrestling with a slow computer system or driving back and forth to the office to turn in paperwork. This simple exercise is guaranteed to uncover opportunities to be more efficient.
Did that home visit end at 10 A.M… or was it 10:15? What about the 20 minutes you spent checking in on a client during your lunch break? If you’re waiting until the end of the day to record your hours, these small details can easily slip through the cracks. Now, multiply this across your entire staff, and you can see why most agencies are missing out on a sizable chunk of billable hours.
Make sure your DSPs are logging their hours at the end of each appointment, rather than waiting until the end of the day to fill out their timesheet. This might mean looking into a software system that’s designed specifically for tracking time, electronic visit verification (EVV), and invoicing hourly services instead of carrying around a notebook.
Each funder sets their own rules for how hours should be rounded. To make matters more complicated, you may need different rounding rules for different funders. For example, some funders allow you to round to the nearest unit, while others expect you to round down to a completed unit and rollover any unbilled minutes. It’s important to do your research and see how rounding rules apply for each different service.
Although it might not seem like a big deal, how you round your billable hours can make a huge difference. Consider this: You have a service that started at 3:04 P.M. and ended at 3:56 P.M., for a total of 52 minutes. If you round to the nearest 15 minutes, you would only get paid for 45 minutes. If, however, you round to the nearest half hour, you’d get paid for a full hour. Likewise, rounding clock times (e.g. 3:04 P.M. to 3:00PM, and 3:56 P.M. to 4:00 P.M.) and rounding entries individually versus together can result in different amounts of billable time.
Here’s another example from a TCM provider: A support coordinator provides two nonconsecutive services in the same day for the same client, one for 32 minutes and one for 22 minutes. Rounding each of these services to the nearest 5 minutes, the 32 minute service would round down to 30 minutes and the 22 minute service would round down to 20 minutes, for a total of 50 minutes. However, adding the two services together first (32 + 22 = 54) would round up to 55 minutes. This means the TCM provider gains 5 additional billable minutes. Over the course of a year, these small differences can really add up!
Given how complex rounding can be, and how much money is potentially at stake, you may want to consider using a software solution that can keep track of these rules for you.
Not all non-billable hours are evil. For example, marketing, fundraising, and training are all examples of non-billable tasks that add value to your organization. However, energy-sapping administrative tasks like transferring notes from paper to the computer, printing out documents, and physically filing papers in a file room are all examples of non-billable work that doesn’t contribute to your bottom line — so it makes sense to have your team spend as little time as possible on them.
Fortunately, many of these tasks can be reduced or eliminated entirely through digitization. For example, using digital forms to collect data in the client’s home or out in the community means staff will no longer need to waste time typing up handwritten information.
Travel is usually non-billable, so any time DSPs spend driving to appointments or to the office to turn in paperwork is time you don’t get paid for. However, travel is a double whammy because you still have to pay DSPs for all of their time even though you’re not able to bill for it.
As many agencies discovered during the pandemic, delivering services virtually can help you recover a significant amount of billable time by eliminating the need for travel altogether. Because they don’t have to drive between appointments, a DSP can meet back-to-back with two clients who live an hour apart. This means they are able to see more clients in the same amount of time, which is especially helpful if you’re short-staffed.
Without a clean and easy way to keep track of authorizations, one of two things usually happens: Either clients are not using all the hours on their authorization, which means they’re missing out on services and you’re missing out on billable hours; or clients go over their authorized hours, which means you’re delivering services that you can’t actually get paid for.
In both scenarios, the problem can be eliminated simply by keeping a closer eye on your authorizations. However, managing authorizations manually can be cumbersome and the time spent on this task is non-billable, so your best bet is to look for a software system designed specifically for this purpose.
Increasing your billable hours is important because it can help you increase your revenue. To increase billable hours, first focus on putting systems in place to track your time more accurately and capture every billable hour provided. From there, you can put additional strategies in place to reduce the time spent on non-billable tasks.
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