• Henry Vu

Take Resourcing to the Next Level with Billable Forecasting

Updated: Oct 29, 2021

In our last blog post Resource Forecasting: Why You Can't Live Without It, we provided a helpful overview of Resource Forecasting with an explanation of the importance of this process and tips on how to get started.

In this article, we will build on those concepts and help you take your resource forecasting process to the next level with “Billable Forecasting”.

What is Billable Forecasting?

Resource forecasting is all about predicting the future workload of your team. It answers the questions “How busy are we going to be?” and “Do we have the right resources to handle the work coming at us?”.

Billable forecasting builds on this and answers similar questions but with a more specific focus on “billable” work. “How busy are we going to be with billable work?” and “Do we have the right resources to handle the billable work coming at us?”.

Why Does It Matter?

1) Revenue and Customer Experience Are Top Priorities

Simply put, not all work is created equal - some projects are of higher priority because they are revenue-generating or have a measurable customer impact. So, while your team may appear to be overloaded with work when you consider all internal and external-facing work, by focusing on just billable work, you may see a different picture.

That’s not to say that internal initiatives are not important. They can be critically important. However, it’s also important to be able to dissect resource allocation in a meaningful way to make decisions when billable priorities are at risk.

2) Billable Forecasting = Revenue Forecasting

In many organizations, billable forecasting can help you predict future revenue when there is a direct correlation between billable tasks and a bill rate. In addition to the questions listed above, “How much revenue can we expect to drive in the coming time period?” is another big one that can be answered if you have a sound billable forecasting process in place.

3) You Get What You Measure

So many articles have been written on the idea that measurements drive behavior. The Harvard Business Review published a popular take on this:

Human beings adjust behavior based on the metrics they’re held against. Anything you measure will impel a person to optimize his score on that metric. What you measure is what you’ll get. Period.

If you focus on billable utilization as an important measure in team meetings and company reporting, your teams will devote more effort to uncovering and delivering that kind of work.

How Do You Do It?

We touched on a number of different resource forecasting methods in our last post Resource Forecasting: Why You Can't Live Without It. Those same methods apply with billable forecasting as long as you consider the following:

  1. Companies have different definitions of the term “billable”. The first thing you must do is create a clear definition of what “billable” means in your project management organization. Billable work does not always equate to direct revenue. For a professional services organization, “billable” is likely to equate to time and materials billing, but for an onboarding team or a custom success team, any customer-facing time may be considered “billable” in a project/resource management sense even though more time spent on a project does not necessarily mean more revenue.

  2. With a clear definition of “billable”, you now have to assign this attribute to your projects and tasks so you can differentiate between billable and non-billable work. Be sure to put controls in place to ensure accuracy when creating projects from templates or when adding tasks to projects in an ad-hoc fashion.

  3. If revenue forecasting is desired, you must find a meaningful way to assign a dollar amount to your billable work. For many, simply specifying a billable rate for a resource or a set of tasks will give you what you need to report on expected revenue over time. The more precise you are in your approach, the more accurate your reporting and the great potential you have to automate billing processes.

  4. Resource utilization targets should be defined at a total level AND at a billable level. For example, you may expect 40 hours of total time to be logged by a resource each week and of that 70% should be billable. This will give your resources a clear measure of billable dedication and a personal stake in achieving the target while leaving time to work on internal or independent work.

  5. Lastly, a word of caution: Find a way to maintain a healthy balance of billable and interesting non-billable work. A billable forecasting process can take you to the next level, but billing time is not the only thing that matters. People come first, so apply billable forecast management in a way that motivates impactful performance but not at the expense of burnout and turnover.


If you are convinced that you need to improve your resource forecasting process with billable forecasting but don’t know where to start, the team at Flux Capacity would love to help.