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Monthly Billable vs Unbillable Time Analysis

What is your opinion of a fair industry average for account service and creative personnel percentage of unbillable time on a monthly basis? I would appreciate your insight.

Mike Thomas
Controller / CFO
Fuse Advertising Inc.

We "expect" our account and creative staff to have at least 120 billable hours per month -- basically 30 hours per week. I actually believe that is well below most agencies expectations, but it does allow a fair profit margin.

Jody Breiland
McClenahan Bruer Communications Inc.

I have heard people throwing around figures at or near 70% tillable for both; however, we have managed to keep our production staff anywhere from the high 70's to the mid-80's, and account services around 55-60%. We believe that our figures are a bit off the norm mainly due to the fact that we specialize in product packaging and display design versus straight advertising. Hope that helps.

Terry L. Jones, Jr.
Harvey and Daughters, Inc.

Creative should definitely be 80% billable / 20% unbillable, they should have no problem reaching that goal. Account Services is a little difficult. They say 70% to 80% billable. Our Account team does not make 80% they reach about 72% billable.

Ed Miller
Grafica

We try to keep creative billable time to at least 80% and Account Service has a goal of 50%

Jerry Bray
COO
Harvey & Daughters Advertising

If they have more than 10% your overstaffed

Steve Orenstein
Kern Direct

We shoot for our creative personnel to be 80% billable on average. Account people should be somewhere around 60% billable. Our administrative people are of course lower. Our studio goal is to be between 55% - 70%.

Shannon Asquith
Business Manager
Tackett Barbaria Design Group

I budget/forecast 85% billable hours from creative (approx 24 hours/mo unbillable), and 75-80% billable for account service (approx 40 hours/mo unbillable). Account service staff attend more management meetings, so are not required to capture as much billable time.

Roxanne Cowan
Rutherford Bolen Group Integrated Marketing

How do you guys generate the numbers to come to how billable someone is? FOr instance, do you take into consideration if someone is on vacation or sick? Do you count pro-bono jobs as "billable time"? I am very interested in hearing how you all calculate the numbers.

Aylie Fifer
Brokaw Inc.

I calculate vacation & sick time into burdened cost. And pro bono jobs are "billable" in the sense I book the revenue, but write-it off in O/H as charity.

Roxanne Cowan
Rutherford Bolen Group Integrated Marketing

Also what about New Business time. We have people who might spend a lot of time on New Business or pro bono in a given time period. Do you treat that time as a thrid category (billable, nonbillable, New Business) or do you still just use Billable and non billable and if your average is 80% billable is that what the other 20% covers along with administrative time? The new business time spent is an important number in our agency and our account people and creatives argue about that.

Bill Scarpa
Backe Communications

I calculate only actual client related time as billable hours. I do not include vacations, in-house or pro-bono work.

Mike Thomas
CFO
Fuse Inc.

You say that you "forecast" 85% billable hours from the creatives, do they actually hit that percentage? We are not seeing percentages that high, of course, we would love it if they were! We are taking a hard look at our "billable/unbillables" hrs. When reviewing these reports there are so many things to keep in mind, how much pro bono, in-house work etc. each designer has been given.

Jean Kl»ndt
Kl»ndt Hosmer Design

Principals & executive staff spend the most time on New Business, their time is O/H anyway. If creative or account service staff get involved, a job is set up and time is "billable". We don't charge it to the client per se, but it is buried in costs as part of the job. That way staff is not penalized for not reaching their billable hour quota. If the job or potential client are "no-go", the entire job gets closed and costs are written off.

Roxanne Cowan
Rutherford Bolen Group Integrated Marketing

Lately- yes staff has been hitting their mark...knock-on-wood!! We have quite a bit of work in-house keeping us busy. This past year has been difficult to hit those % of billable time, and we had to let a few staffers go and convert a couple to part-time as well. We encouraged vacation time during the slow period. But we did a few pieces for ourselves during this time. It let the creative staff stay "billable" and we updated our own collateral pieces and website. And we did some pro bono work that yielded us some good press - hopefully garnering some real work down the road. When I forecast billable time - I'm more concerned about "capacity" than "profitability". I want to keep the staff busy, so they stay motivated and happy. Billable to me means working on production pieces, be they pro-bono, in-house jobs or client work. I stay awake night worried about profitability...! My forecasting allows me to have a plan to veer from!! Wouldn't it be great if we could just follow the business model we lay out in the beginning of the year??

Roxanne Cowan
Rutherford Bolen Group Integrated Marketing