How to track billable and non-billable hours

Why separating the two matters

I often talk to freelancers who just log everything in one big block. Later when invoicing they realize half the hours are not billable. That hurts.

Billable hours are the ones you can charge to clients. Non-billable hours are internal work that still needs doing. Client meetings, sorting emails, accounting, sales. Both need tracking, but separately.

Real examples from daily work

A developer spends three hours coding for project A. That is billable. Then one hour fixing a bug in an old project that is no longer paid – non-billable. Two hours researching a new proposal – also non-billable. If you do not separate these clearly you lose sight of your real utilization.

How to track billable and non-billable hours in practice

The easiest way is an app that supports tags or projects. You create a project per client and mark tasks as billable or non-billable. With Jomawo you do this right when starting the timer.

Some still use Excel. It works for a few projects but quickly becomes messy. Better is software that also creates reports later. You immediately see what percentage of your time is actually paid.

Step-by-step in daily life

1. Start the timer as soon as you begin client work.
2. For internal tasks create a separate entry tagged non-billable.
3. Check in the evening that everything is assigned correctly.
4. Look at the weekly report: what share is billable?

I used to forget logging internal tasks myself. At the end of the month hours were missing from the calendar. Since I track everything I see much more clearly where time disappears.

Common mistakes when tracking

Many forget the small non-billable tasks. Five minutes here, ten minutes there. It adds up. Others track everything but skip tags. Later they cannot tell why a certain hour was not billed.

Travel time is another tricky point. Some clients pay for it, others do not. A clear rule applied right when tracking helps.

How good software supports you

With free time tracking you can mark projects as billable with one click. Reports then show the difference instantly. You see how much time you really bill per client and where internal tasks take too much time.

I also recommend reviewing the data once a week. You notice early when a project consumes too many non-billable hours and you might need to adjust pricing.

A related article is Project time tracking – how to track projects efficiently. It covers the practical side with multiple running projects.

What has worked well for me

It works best when I plan the main tasks as billable or non-billable in the morning already. Then the timer runs and I do not have to think much. A quick evening check is enough. That saves time and nerves.

In the end it is not about logging every minute. It is about using the right categories. At the end of the month you know exactly where your money comes from and where you are giving time away.