Billable hours

An hour is billable when the client agreed to pay for that kind of work. For most freelancers and agencies that means the delivery itself: design, development, writing, consulting calls, research the client asked for, and revisions within scope. Client meetings, status updates, and project management time are billable when the contract says so, which is why clear terms matter more than any tracking tool.

The edge cases cause the disputes. Travel time, waiting on client feedback, fixing your own mistakes, and onboarding yourself to a client's systems are billable in some agreements and not in others. Decide these before the work starts and write the decision down.

Non-billable hours are everything you do to run the business: proposals, invoicing, bookkeeping, marketing, learning a tool, internal meetings. They are not wasted — they are overhead — but they are not charged to anyone. The ratio between billable and total hours is your utilization rate, and it is the single most useful number for pricing yourself.

Tracking non-billable time matters as much as tracking billable time. If you only record what you charge, you cannot see how much unpaid work each client quietly creates, and you cannot set an hourly rate that covers it.

Record time as it happens rather than reconstructing it at the end of the week. Memory under-reports short tasks — the five-minute email, the quick fix — and those add up to real money. Attach every entry to a client and a project, mark it billable or not at the moment you log it, and keep a one-line note describing the work so the invoice can show it.

Round consistently. Many service businesses bill in 6-minute (tenth of an hour) or 15-minute increments. Whatever you choose, apply it the same way on every invoice and state it in your terms.