How to Track Billable Hours: A Guide for Consulting Firms

For consulting firms, time is more than a measure of attendance. It is one of the inputs that determine revenue, project profitability, client billing and workforce capacity.

Consultants may spend their day moving between client meetings, research, project delivery, internal meetings and administrative work. Some of that time can be billed to a client; some cannot. Without an accurate way to distinguish between the two, firms can struggle to understand how their people are spending time and whether projects are being delivered profitably.

This makes how to track billable hours an important operational question for consulting firms. It is not simply about filling in timesheets. Effective billable-hours tracking gives firms the data they need to manage projects, measure utilisation and plan their workforce.

Kenya’s professional services sector also continues to represent a significant part of the economy. The KNBS 2026 Economic Survey reports that Kenya’s economy grew by 4.6% in 2025, with professional, scientific and technical activities among the services that contribute to the country’s economic activity.

So, how should consulting firms approach billable-hours tracking?

What Are Billable Hours?

Billable hours are the hours an employee spends working on activities that can be charged to a client under the terms of an engagement.

For example, a consultant working on a market research project might spend two hours analysing data, one hour preparing a client presentation and one hour in a client meeting. If all those activities fall within the scope of the engagement, they may be recorded as billable time. By contrast, time spent on internal training, administrative tasks, business development or general team meetings may be non-billable.

The distinction is important because not every hour worked generates revenue. A consulting firm therefore needs visibility into both:

Total hours worked = Billable hours + Non-billable hours

Tracking only attendance tells you how long someone worked. Tracking billable time tells you how that working time was allocated.

How to Track Billable Hours Accurately

Accurate billable-hours tracking gives consulting firms a clearer view of where employee time goes, which projects are consuming resources, and whether client work is being delivered within scope. A reliable process should make it easy to capture time as it happens while keeping billable and non-billable work clearly separated.

1. Define What Counts as Billable

Before implementing a tracking system, consulting firms should establish clear rules for what counts as billable and non-billable time. These rules should align with client contracts and project requirements. For example, billable activities might include:

• Client meetings
• Research and analysis
• Project delivery
• Report preparation
• Client-specific travel, where contractually billable
• Consulting or advisory work

Non-billable activities might include:

• Internal meetings
• Training
• Business development
• Administrative work
• General team management
• Annual leave and other absences

Without clear definitions, two consultants working on similar projects could record the same activity differently, making utilisation and project reporting less reliable.

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2. Record Time Against Projects

Knowing that a consultant worked eight hours is useful. Knowing where those eight hours went is much more valuable. Consulting firms should allow employees to record time against specific:

• Clients
• Projects
• Tasks
• Engagements
• Cost centres

This creates a direct link between employee time and client work.

For example:

The firm can then see not only how much the consultant worked, but how their capacity was allocated.

3. Make Time Tracking Easy

One reason timesheets become inaccurate is that employees are expected to reconstruct their working day from memory.

A consultant who worked across three clients may struggle to remember whether a particular meeting lasted 45 minutes or an hour. Small inaccuracies can accumulate across an entire team.

A better approach is to make recording time part of the normal workflow.

Consultants should be able to record hours when work happens, whether they are working from a client site, office or remotely.

This is particularly relevant for modern consulting firms with flexible working arrangements. Factorial’s HR solution allows employees to clock in and out from different working environments, including on-site, off-site and remote work, while also supporting mobile time tracking.

Why Billable Hours Matter for Workforce Planning

The value of billable hours tracking goes beyond invoicing. The data can help consulting firms answer a much bigger question:

Do we have the right people available for the work we have committed to deliver?

Imagine a consulting firm has five consultants available for a new project. Their schedules may appear open, but historical time data could show that several consultants regularly spend significant portions of their week on internal work, existing clients or business development.

Without that visibility, managers may overestimate available capacity.

With accurate billable-hours data, they can compare:

Available capacity → Current workload → Billable demand → Resource gap

This makes workforce planning more evidence-based.

Track Billable and Non-Billable Hours Together

It can be tempting to focus entirely on billable hours because they are directly connected to revenue.

However, non-billable time matters too.

Consultants need time for training, mentoring, internal collaboration, administration and business development. If a firm focuses only on maximising billable hours, employees may have too little capacity for activities that support long-term growth.

Instead, firms should monitor the relationship between billable and non-billable time.

This can help identify patterns such as:

• Teams consistently spending too much time on administration
• Consultants with excess capacity
• Employees carrying too many projects
• Projects requiring more time than initially estimated
• Internal processes reducing productive capacity

The goal is not necessarily to make every hour billable. It is to understand where workforce capacity is going and whether it aligns with business priorities.

Measure Consultant Utilisation

One of the most useful metrics generated by billable-hours tracking is utilisation. A simple utilisation calculation is:

Billable hours ÷ Total available working hours × 100

For example, if a consultant has 160 available working hours in a month and records 120 billable hours:

120 ÷ 160 × 100 = 75% utilisation

Tracking utilisation over time can help managers identify whether teams are underutilised, appropriately staffed or consistently operating at capacity.

It can also support better project staffing decisions. If one team is consistently at 90% utilisation while another is at 55%, managers may need to rebalance workloads before hiring additional employees.

Use Time Data to Improve Project Estimates

Historical billable-hours data can also improve future planning.

Suppose a consulting firm estimates that a particular type of client engagement requires 100 hours. After completing several similar projects, its records show that the average engagement actually takes 135 hours. That information can improve future project estimates.

Over time, firms can compare:

Estimated hours vs. actual hours

This can reveal where projects are being under-scoped, where processes are inefficient or where additional resources should be included in future proposals. In this way, time tracking becomes a source of business intelligence rather than simply an HR record.

Consider Compliance When Tracking Working Time

Billable-hours tracking should not replace proper working-time records.

Under Kenya’s Employment Act, employers must regulate employees’ working hours in accordance with applicable law, and employees are entitled to at least one rest day in every seven-day period.

Consulting firms therefore need to distinguish between billable time and total working time.

An employee could record six billable hours while working nine hours in total. The remaining three hours still form part of the employee’s working day and should not disappear simply because they cannot be billed to a client. Accurate time records can help HR and managers maintain visibility into both dimensions.

How Factorial Can Help Consulting Firms Track Time

For consulting firms, the challenge is bringing time tracking, workforce data and HR processes together without creating more administrative work.

Factorial’s HR solution for consulting companies provides time and attendance tools that allow employees to track working hours from different locations, including through mobile devices. Managers can access HR reports and analytics, monitor accrued hours, manage absences and automate administrative processes.

This creates a centralised view of employee time that can support more accurate workforce planning.

Instead of relying on disconnected spreadsheets, firms can use time data to understand who is working, what they are working on, how much capacity they have and where additional resources may be required.

A Practical Billable-Hours Tracking Checklist

Before implementing or reviewing a billable-hours process, consulting firms should ask:

1. Have we clearly defined billable and non-billable activities?
2. Can consultants record time against specific clients and projects?
3. Can employees track time while working remotely or at client locations?
4. Can managers compare estimated and actual project hours?
5. Are billable and non-billable hours tracked together?
6. Can we calculate consultant utilisation accurately?
7. Can time data inform workforce and capacity planning?
8. Are total working hours recorded separately from billable hours?

If answering these questions requires multiple spreadsheets and manual reports, it may be time to rethink the process.

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How to Turn Billable Hours Into Workforce Intelligence

Knowing how to track billable hours is only the starting point for consulting firms.

The real value comes from what firms do with the data.

Accurate time tracking can help consulting leaders understand project profitability, monitor utilisation, forecast capacity, improve project estimates and make better decisions about hiring and resource allocation.

For HR teams, it also creates greater visibility into working patterns and employee capacity. For project managers, it provides a clearer view of delivery. And for business leaders, it turns employee time into data that can inform growth.

The goal is not simply to track every hour. It is to understand how those hours are being used—and whether the firm’s workforce is aligned with the work it needs to deliver.

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Note: This article provides general information and should not be treated as legal advice. Working-time requirements may vary depending on an employee’s contract, applicable regulations, collective bargaining agreements and other Kenyan laws.