Overview
As you use Parallax, you'll see the terms "billable" and "non-billable" used quite often - but how is Parallax defining them? In this article, we'll break down exactly what we mean when we say someone is billable or non-billable - and what it doesn't mean.
| Check this section out for the true intent and primary usage of the terms Billable and Non-Billable. | |
| In this section we'll talk about how this relates to hours submitted through a Timesheet - what does or doesn't make them billable. | |
| Here we'll touch upon the worker type and what that does and doesn't affect. | |
| We'll talk here about why Parallax defines billability the way we do. |
Projects
Anywhere you see the terms Billable and Non-billable within Parallax, this will be what is being referred to:
Billable is defined as any Project that is not under the Internal Financial Model. This includes Time & Materials, Fixed Bid, Fixed Retainer and Mixed Financial Models.
Non-Billable is defined as any Project that is under the Internal Financial Model.
*Note: Does this mean that all Planned and Actual hours on a Billable Project are considered Billable?
We'll address this further below - but yes. For the purposes of planning, capacity, and utilization, all hours on a Billable Project (Time & Materials, Fixed Bid, Fixed Retainer, Mixed) are always considered Billable by Parallax.
Within Financial Settings (and when creating a Project), you will now have the ability to select a Type at the Project Level.
This Project Type will then dictate which Financial Models that you can apply to each individual Offering within the Project. The idea is to categorize your Project based on it's overall purpose, allowing you to apply Financial Models that apply.
The Project Types you'll see are:
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Client: This Type is exactly what you'd think - it's intended for Projects being completed for a specific Client. Within Client Projects, for each Offering you will still select a Financial Model, but they will now be grouped into two categories:
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Billable Financial Models - These are not changing, and will continue to include the T&M, Fixed Bid, Retainer, and Mixed Models. Plans and billable Actuals will continue to be when filtering Insights by both Billable and Total.
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(New) Non-Billable Financial Models - These represent things like prospecting or other tasks that are attributed to a Project on behalf of a Client, but for which the work completed is not billable. Plans and Actuals for these Projects will be have a $0.00 Bill Rate applied, thus accruing no Revenue. They are excluding when filtering Insights by Utilization Billable, and included when filtering by Total.
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Internal - Formerly a Billing Model, the Internal Type is intended for any work that's not billable and not attributed to any specific Client. This may include regular meetings, internal projects and strategic initiatives - really any Projects that are not attributed to a Client.
Currently, there are two Models - unlike billable Projects, selecting these will not affect how Clients are billed, but instead the purpose of the projects*:- Investment - These are Internal Project Offerings that are not actively tied to a single Client, but still represent productive work. These are initiatives that improve efficiency, result in updates to process, and otherwise represent productive work.
- Admin - These are Internal Project Offerings that are not tied to any specific outcome, and do not represent productive work. These may be weekly company meetings
Hours
Timesheet providers will typically give you the option to differentiate between Billable and Non-Billable Hours - please know that this distinction does not carry through within Parallax since whether or not Hours are Billable is based on the Financial Model of the Project, not how they are categorized through Timesheets.
However, we do surface whether or not a Timesheet has categorized Hours as Billable/Non-Billable within a Project in one place - the Chart and Data Table found on Overview section of Project Management Page. Here you are able to toggle there between Financials and Hours.
Please keep in mind that this is presented as a way to help reconcile billable/non-billable distinctions within your Timesheet, rather than Parallax treating these hours as Billable or Non-Billable.
In this case, while the Timesheet may consider that 11 of the Actual hours are non-billable, for the purposes of capacity, utilization, etc. this Person has 20 Actual Hours that will be considered Billable.
People
When editing People in Settings > People, you have the option to indicate that a Person is Billable or Non-Billable. This is intended to be used for the sake of segmentation, and hours for both roles will still be considered Billable or Non-Billable based on the assigned Project. Ex. If a non-Billable worker is intended to have no Billable Capacity, but you still want the ability to add them to Billable Projects, the best way to do this is to set their Custom Capacity to 0%.
Why do we define things this way?
Simply put, if you're not charging a Client for the hours you're spending working on projects for them, you're spending money doing so. If you're spending time and money on projects that do not correlate to a billable return from the Client, this is something that Parallax is intended to surface. We understand there may be meaningful reasons why you may not choose to charge a Client for work that is completed - but Parallax exists in part to surface the impact that things like this is having on your business.
In short, Parallax may be used to reaffirm the choice complete work for a Client that is not billed to the Client or it may be used to reassess that choice, but Parallax may not be used to obscure that decision.