Make performance measurable, and comparable

In many professional services firms, hours get logged against broad catch-all categories: “consulting”, “project work”, “client contact”. For invoicing that’s often enough. For a proper analysis it’s far too coarse: you see that the hours were logged, but not what kind of value they actually delivered.

The problem: hours, revenue and margin are not the same thing

A single logged hour can mean very different things:

• Billable consulting at the client, day rate 175 € per hour, direct revenue, high margin.
• Workshop preparation, internally paid, not directly billed, an upfront investment.
• A mandatory internal meeting such as compliance training, no value creation in the strict sense, but required.
• Business development for a new customer, an investment with future revenue attached.
• Complaint handling, where value creation is zero or negative once you factor in the follow-up cost.

A team that throws all five into a single bucket sees the volume but not the quality. Utilisation reports look great while margin quietly erodes.

The solution: hour types and role targets

In teamspace you define hour types that classify every booking by the kind of value it creates. When logging an hour, the consultant picks not just the project but also what kind of work it was:

• Billable project work
• Non-billable project work (e.g. covered by a flat rate)
• Sales and business development
• Internal development
• Mandatory meetings and admin
• Complaint handling and rework

Reporting then gains a second dimension: you can see how many hours went into engagement XY, and what share of that turned into actual delivery.

Role targets: making performance comparable

Hour types alone aren’t enough. To compare performance fairly, you need target values, broken out by role, seniority and customer segment. A few practical examples:

• Senior consultants should land in the 75 to 80 percent billable range.
• Project managers typically sit between 60 and 70 percent, because more steering work is built into the role.
• Juniors and interns start at 40 to 50 percent and ramp up over time.

In teamspace you store these role targets. Reporting then shows not just absolute numbers but the gap to target. A consultant at 65 percent isn’t automatically underperforming if their role target is 60 percent.

Three reports that pay off straight away

We recommend three standard reports that deliver value immediately for consultancies and IT services firms:

1. Billability per consultant. What share of logged hours is billable? Trended over the last 12 months.
2. Performance vs. role target. Per consultant and role: where is the target over- or under-achieved? With drill-down to individual engagements.
3. Live engagement margin. Revenue (billed hours) minus cost (internal rates), per engagement, phase and role.

With these three views you can make steering decisions before the quarter ends, not after.

What teams typically see when they switch

In our customer projects we see the same effects come up again and again when teams move from catch-all categories to differentiated hour types:

• Upfront investments become visible for what they are: business development and concept work shows up as investment with expected returns.
• Stronger fee conversations. A firm that can show, per engagement, what share went into actual delivery has a different kind of conversation with the client.
• Clearer steering discussions. Instead of “why is our margin slipping?” you get concrete levers: less rework, more billable days, fewer internal meetings.

What you can do, even without teamspace

Even if you currently run on Excel or another tool, the logic carries over. Define five to eight hour types, communicate them clearly, and review the billability ratio at least monthly. That alone is real progress.

If you want this logic in an integrated platform, directly connected to projects, invoicing and reporting, get in touch. In a 15-minute call we’ll look at your specific situation and tell you honestly whether teamspace is a fit.

Read more

• Time tracking — the pillar page with FAQ, comparison and compliance notes.
• Project management software — plan, actual and forecast in real time.
• Multi-project management software — when several projects run in parallel.
• Capacity planning — utilisation per person and team.
• Activity record — hour evidence per client as PDF.