Billable Hours Calculator

Recorded time is not revenue. Some of it is written down before an invoice goes out, and some of the invoice is never paid. The gap between the two is routinely twenty percent or more, and it is invisible if you only track hours.

This calculator follows the money from recorded time through realization and collection to cash, and reports the effective rate you actually earn for each hour recorded.

Result

Cash collected

$412,965

Effective rate per hour recorded

$299.25

Annual billable hours: 1,380
Monthly billable hours: 115
Value of time recorded: $483,000
Value invoiced: $434,700
Lost to write-downs and non-payment: $70,035
Overall yield: 85.5%

This tool performs arithmetic on the values you enter. It does not provide legal advice and does not create an attorney-client relationship.

Recorded time is not revenue. Write-downs before invoicing (realization) and unpaid invoices (collection) both reduce it, and the effective rate is what remains per hour recorded.

A one point improvement in collection is usually easier to win than a rate increase of the same value.

From recorded time to cash

Stage	Value	Share of recorded
Time recorded	$483,000	100%
Invoiced after write-downs	$434,700	90%
Cash collected	$412,965	85.5%

How to use the billable hours calculator

Enter the billable hours you genuinely record in a working day.
Enter days per week and working weeks per year, excluding holiday and leave.
Enter your standard hourly rate.
Enter realization and collection percentages, then read the collected value and the effective rate.

What people use this for

Setting a realistic annual billable target.
Quantifying what a realization improvement is worth in cash.
Comparing an hourly practice against a flat-fee one on the same basis.
Checking whether a rate increase or a collection improvement is the better lever.

Worked examples

Every figure below is produced by running this calculator against the example inputs, so the numbers always match the tool.

A realistic target

6 billable hours a day, 5 days a week, 46 weeks a year, at $350 an hour with 90% realization and 95% collection.

Cash collected: $412,965
Effective rate per hour recorded: $299.25
Annual billable hours: 1,380

The same hours with weaker collection

Identical time recorded, but realization at 78% and collection at 85%.

Cash collected: $320,229
Effective rate per hour recorded: $232.05
Lost to write-downs and non-payment: $162,771

Where the money actually goes

Recorded time becomes invoiced time only after write-downs: the hours a supervising lawyer removes, the work the client would not accept, the time that in hindsight should not have been spent. Invoiced time becomes cash only after collection: what is paid, when it is paid, and what is written off.

Both are percentages, and percentages multiply. Ninety percent realization and ninety-five percent collection is an overall yield of 85.5%, which means one hour in seven is recorded and never paid for.

Collection is usually the cheaper lever

A rate increase requires client agreement, usually written notice, and it puts the relationship into play. A collection improvement requires better invoicing discipline and earlier conversations about money.

On the numbers, a five-point improvement in collection is worth roughly the same as a five percent rate increase - and it is generally easier to obtain and less likely to cost you a client.

Methodology and assumptions

What this calculator does, and what it deliberately does not do.

Annual hours = hours per day × days per week × weeks per year.
Recorded value = annual hours × rate. Billed value applies realization; collected value then applies collection.
The effective rate divides collected value by hours recorded, which is what an hour of your time is genuinely worth.
The tool performs arithmetic or date counting on the values you enter. It does not interpret a rule, a statute or a contract.
Nothing you type is transmitted or stored - the calculation runs entirely inside your browser.

This website provides general informational and productivity tools and does not provide legal advice or create an attorney-client relationship.

The date and deadline tools count days exactly as you instruct them. They do not interpret court rules, statutes of limitation, filing requirements or any other legal authority, and they do not know the rules of your jurisdiction.

Always verify any date, fee, or calculation against the governing rule, the court calendar and your own professional judgement. If you need legal advice, consult a lawyer licensed in your jurisdiction.

Frequently asked questions

What is a realistic billable hours per day figure?

Considerably lower than a working day. Administration, business development, training and supervision are real and unbillable, and a target set as if they do not exist produces a target nobody meets.

What is the difference between realization and collection?

Realization is the share of recorded time that reaches an invoice. Collection is the share of invoiced value that is actually paid. They measure different failures.

How do I find my own rates?

Most practice management systems report both. If yours does not, compare recorded time value against invoiced value, and invoiced value against cash received, over a full year.

Does this account for non-billable time?

Indirectly - it should already be excluded from the hours per day figure. Use a utilization calculator to measure it explicitly.

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