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 something is billable or non-billable, and what it doesn't mean - and most importantly, why we've defined them this way.
|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 Employee type and what that does and doesn't affect.|
|We'll talk here about why Parallax defines billability the way we do.|
Almost anywhere within Parallax that you see the terms Billable/Non-billable, this will be what is being referred to. This includes the Assignments View and Shaper, the People Listing Page, and most importantly Insights Reports.
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.
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 present 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 Employee has 20 Actual Hours that will be considered Billable.
When editing an Employee in Settings > Employees, you have the option to indicate that an Employee is Billable or Non-Billable, however, please keep in mind that 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. If a non-Billable Employee 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. We hope this makes sense!