01 / FREE AGENCY TOOL
Agree on the denominator first
Available hours should describe the people and period you are measuring. Decide how holidays, leave, part-time schedules and company closures affect that capacity. A 160-hour monthly denominator and a 120-hour billable total produce 75% utilization, but the percentage changes if 16 hours of approved leave are removed. Neither convention is automatically useful without an explanation. Document the policy and keep it stable when comparing months, teams or individuals.
02 / FREE AGENCY TOOL
Keep billable, billed and collected separate
Billable time is work that belongs to a billable category or engagement. Billed time has actually reached an invoice, and collected revenue has reached the business. A high utilization figure does not prove that all hours were accepted by the client or that the invoice will be paid. Review write-offs and realized rates alongside this number. For fixed-fee projects, the billable classification can still be useful, but it does not imply an additional hourly charge.
03 / FREE AGENCY TOOL
Work through a concrete example
The prefilled example is a planning scenario, not a customer result. Billable hours: 120 hours; Available working hours: 160 hours; Planning target: 75 %. Change these values to match your situation, then calculate again. Save the CSV if you want a record to discuss with a colleague or compare with a later review.
Billable utilization = billable hours ÷ available hours × 100. Target hours = available hours × target percentage.
| Result | Example output |
|---|---|
| Billable utilization | 75% |
| Hours at target | 120 |
| Hours above / below target | 0 |
| Non-billable capacity | 40 |
04 / FREE AGENCY TOOL
Choose a target for a role, not a slogan
Delivery specialists, account leads and agency owners have different responsibilities. A person responsible for sales, coaching and operational decisions may need more non-billable capacity than someone assigned mostly to production. Use a planning target that reflects the role and service model. The tool allows you to test the hour gap at a target you choose; it does not label a universal percentage as healthy or unhealthy.
05 / FREE AGENCY TOOL
Investigate the pattern behind a variance
Below-target utilization can indicate a weak pipeline, delayed client input, inaccurate scheduling or necessary investment in better processes. Above-target utilization can indicate strong demand, overtime or inconsistent recording. Ask which explanation is supported by the work. A single month may be distorted by leave, a launch deadline or a new hire ramping up. Compare a meaningful sequence of periods before making staffing or performance decisions.
06 / FREE AGENCY TOOL
Connect capacity to the next delivery decision
Use the result to decide whether to move work, protect focus time, bring in a specialist or change the pipeline plan. Do not fill every spare hour merely to improve a percentage: internal improvements and recovery time can support future delivery. Combine utilization with project margin, forecast demand and agreed client deadlines. That combination helps distinguish profitable capacity use from a team that is simply very busy.
THE PRACTICAL DETAILS
Questions, answered.
Can utilization exceed 100%?
Yes, the tool permits and flags it. Check overtime, period alignment and whether available hours were understated.
Should leave be included?
Choose and document a consistent policy. Many teams subtract leave from available capacity, but comparisons must use the same convention.
Is a higher number always better?
No. Excessive utilization can leave no room for coordination, improvement or recovery. It also says nothing about the margin of the work.
Can I combine several people?
Yes. Sum billable and available hours for the same group and period, then calculate the ratio from those totals.
Does target variance represent revenue?
No. The gap is measured in hours. Converting it into revenue requires a realistic rate and actual demand for that capacity.