What is Your Effective Billing Rate?

Do you know how to calculate your effective billing rate? It’s pretty easy. Just divide your revenue by working hours. If you brought in $10,000 and worked worked 80 hours, your effective billing rate is $125. ┬áNice!

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But if you brought in that same $10,000 but worked 80 hours on the project and 40 hours on secondary stuff, your effective billing rate is only $83. It’s that “secondary stuff” that kills you. We’re talking admin, email, Facebook, Twitter, hanging out, and goofing off. Of course, everyone has to goof off a little. We’re not machines. But still, it’s nice to know what we’re actually bringing in for every scheduled work hour.

The video below talks about finding your effective billing rate for a given time period, or for a certain project. That’s harder to do because you have to collect up all the revenue from time logs for that period, and divide that by scheduled hours. You probably need a good timesheet and project management app to do that.