Un-Billable

Term Definition
Un-billable or non-billable refers to resources that cannot be billed to clients.

In many professional service organizations the un-billable resources are increasing while billable resources or front line groups, which drive revenue suffer from an almost complete lack of productivity and mechanization tools. Essentially, these organizations have produced a situation in which the back-office functions and systems are driving the front-line, revenue-producing part of the organization — not an optimal situation. 

Much like manufacturing or distribution companies, project- and service-oriented organizations have their own unique business processes. If software applications are to be implemented in order to streamline such processes, then the functionality these applications adopt must focus on the project lifecycle.

Some of the unique requirements for Professional Services Organizations are dictated by whether their projects are for cost centers (non-billable and based on budgets) or profit centers. Many IT departments are engaged in internal software development, engineering, R&D, and product design, and only serve internal clients. The projects and services implemented for these internal clients are based on corporate budgetary constraints and are non-billable work. Some professional service organizations perform work for external clients, and usually perform their billing based on various rating algorithms.

Regardless of whether the work is being done for internal or external clients, the focal point is on implementing the project or service. As such, several questions need to be addressed. How can organizations:

• Manage to deliver projects on time and within budget?
• Ensure that proper resources are in place to deliver such projects?
• Effectively report on project information in real-time?
• Ensure that project information is accessible at all times by anyone?
• Ensure that employees focus on core responsibilities rather than administrative tasks?

Due to increased industry complexities and inefficient corporate processes, service workers are not focusing on their key responsibilities. They are instead being bombarded with increasing amounts of administrative tasks, technology issues, unmanaged workloads, and lack of information.

Area of Application
Cost Accounting

Related Terms
Time and Billing

Your Comments and Recommendations

Please help us improve the project management software glossary. Was this term well described? Any suggestions of how we can improve the description, what to add, remove or change? You can also use this form to suggest new project management terms we should add to the glossary.