A common question we get asked by new users of WorkflowMax is “how do we record time for internal meetings, staff training, admin time, annual leave, etc.
This week's tip will highlight how to account for these, and other, non-billable time amounts.
How do I account for non-billable time?
In an ideal world it would be fantastic if you could track every minute, for every staff member, for every day of the year with the ability to report on that time in exquisite detail.
In fact, if you want deep insights into how and where you might be able to improve productivity in your business, such reporting is essential, and should be near the top of your wish-list.
WorkflowMax can help you achieve just this.
There are two types of non-billable time.
- Non-billable time on billable jobs. This type of non-billable time relates to actual time incurred on a billable job which needs to be written down, or written off.
- Non-billable time that does not relate directly to any billable jobs. This is commonly called ‘internal time’ and is tracked by way of an ‘internal job’.
In this blog we are only going to focus on the second of these types - internal time, as this type of non-billable time usually makes up the vast majority of the total non-billable time in any business.
Examples of non-billable time include, but are not limited to:
- Internal staff meetings
- Administration overhead which cannot be directly attributed to a particular Job - this might be broken down into multiple sub-categories, such as payroll admin, HR admin, accounts admin and the like
- All types of staff leave - annual, sick, bereavement, maternity, study, unpaid etc
- Public holidays
- Training and professional development
- Conference and expos
Tracking these types of non-billable time is achieved by setting up an 'Internal job' in WorkflowMax with multiple tasks (one task for each type of internal time) that are all flagged as being non-billable.
Your staff can then enter time against the appropriate non-billable task, on the internal job.
To set up the internal job that your staff will record non-billable time against, complete the following tasks:
1. Set up your own organisation as a client
Go to the Client Manager and set up your own organisation as a client. The internal job will need to be set up with your organisation as the client.
2. Decide on the list of non-billable tasks
Carefully consider the list of tasks that you will want your staff to be able to allocate their non-billable time to.
Decide whether you want to create a task name for every internal task - such as sick leave, annual leave, bereavement leave. Alternatively you can use a generic task name in conjunction with task labels. For example, where the task name is ‘Leave’
- Task name - label
- Leave - sick
- Leave - annual
- Leave - bereavement
3. Add the tasks you will use in your internal job in your task database
Now create a task for each work area you listed:
- In the Business menu, select Settings > Tasks > New Task.
- Give the task a suitable name, such as: Staff Training, and a description.
- Set both the Task Base Rate and the Task Billable Rate to 0.00.*
*Note you should only ever do this for internal tasks. All tasks that may be invoiced out to clients should always have non-zero base and billable rates. Internal tasks will never be included on a quote, so the base rate can be 0.00. And you will never invoice out from an internal task, so the Task Billable Rate can also be 0.00.
- Complete the other fields as required and Save.
Note that at this stage there is no option to flag the task as non-billable. Flagging the tasks as non-billable will be done when the internal job is created with these tasks on it.
Repeat for each item in your list. For general information about creating tasks, see Creating a task.
4. Create an internal job
Create the internal job to which you will assign the tasks you have just created.
- In the Jobs menu, select Jobs > New Job
- Select your own business as the client.
- Name the job Internal Job (or similar).
- Set the Start Date and Due Date as the start and finish of your financial year or whatever time period suits your needs.
- Assign all your staff to the job and Save.
For general information about creating jobs, see Creating a job from scratch.
5. Assign tasks to the job
Now assign the tasks to the internal job.
- On the Job Information screen for your internal job, select + New Task.
- Leave the Estimated Time as 0.00.
- Important! - Deselect the Billable checkbox.
- Set the Start Date and Due Date to match the dates you specified above for the job itself.
- Select the staff that you want to be able to record non-billable time against the task. For example you may only want to allocate admin staff to the admin tasks. But remember that if you allocate any staff to the task, only the selected staff will be able to record time against this task.
- If you do not allocate any staff to the task, all staff members allocated to the internal job will be able to record time against the task. This is preferable for internal tasks such as ‘Leave’
- Save and repeat for each internal task (do NOT use Add Multiple Tasks) as this will leave the tasks all marked as billable, instead of non-billable
Using the internal job to record non-billable time
Now when your staff need to enter "internal" non-billable activities they can select the internal job and the specific task, Staff Meetings (for example) and record time against that task.
The idea is to have the one internal time job set up where any time not being billed to a client can be accounted for.
You can then report per week or month (or any other period) for time entries against the tasks on that job, or by staff member, or as required.
Your staff can enter (for example):
- 8 hours against the task for Annual Leave, for a days holiday taken
- 4 hours against Sick Leave for a half day taken off
- 1 hour against Staff Meetings, and so on.
You can also create custom reports specifically for this non-billable time from the Reports > Report Builder and select Report Type = Time.
- More: Report Builder
For example you may want to know
- How many hours were spent at internal meetings and what did they cost?
- How much time is spent preparing invoices?
- How many sick days did each staff member log?
Data is key - knowing this information will help you to put in processes to streamline non-billable time and increase your overall profitability.
Using the internal job in future years
Although you can use a single Internal Job forever, an alternative is to start a new internal job for each financial year. Use the Copy Job option to copy the job, name the new job ‘Internal Job - 2020’ and change the state of the ‘Internal Job - 2019’ to completed.
If you have any trouble creating an internal job or timesheet reports reach out to support.xero.com and our team will assist.
Do you have any other tips you would like to share?
Let me know in the comments below and it could feature as a future tip of the week.