How to Track Billable Hours: A Step-by-step

How to Track Billable Hours: A Step-by-step

Keeping track of billable hours is one of the most challenging tasks for any accountant, bookkeeper, or tax professional. Even if you are lucky enough to work from home, losing track of time during the day is easy. And that can have devastating effects on your business in the long run. That’s why it’s essential to create a system that tracks your billable hours and makes sure you invoice your clients for every hour worked. Keeping track of your time saves you money down the road and ensures that you take advantage of tax deductions and other opportunities as an independent contractor. Let’s explore how you can track billable hours to focus on getting work done as billing for your services.

Why is it so challenging to track billable hours?

Several factors make it challenging to track billable hours. First is that your clients will not tell you how long it will take to complete a project. This means there’s no way to know if you’re on track with your projections. You also work in a very subjective profession with no set milestones or endpoints. What makes a given amount of time for one client may take double or triple that amount for another. Beyond that, you have other administrative tasks that take up your time during the day. These include finding new clients, marketing your services, or managing your finances. Tracking your time for each of these tasks can be difficult.

Why is tracking your time important?

Tracking your hours is the best way to optimize your profitability. If you’re not keeping track of how many hours you’ve worked, you not only miss out on significant tax deductions but also lose the opportunity to bill your clients. If you don’t know how much time you spend on different tasks, you won’t be able to bill your clients. And if you’re not billing your clients, you’re losing money. You need to track your hours to ensure that your clients are paying you. And if you want to optimize your profitability, you need to keep track of your hours.

Create a simple timesheet

A timesheet is the simplest way to track your hours. All you have to do is write down the projects you’re working on, the hours you spend on each project, and the date you worked on the project. You can write your timesheet on any piece of paper, notebook, or word processing application you prefer. Whatever works for you is fine. You can even use a spreadsheet to keep track of your time if it helps you keep everything organized. make sure that you’re consistent in how you track your time.

Establish a routine for tracking your hours

If you work with clients and have a variable schedule, keeping track of your hours might be difficult. You need a routine that helps you track your hours regardless of whether you work at home or in the office. It doesn’t matter how you follow your hours. You can use a paper timesheet, a spreadsheet, an online time tracking application, or even a digital pen and paper notebook. What matters is that you’re consistent in how you follow your hours. Whatever method you use, ensure that you stay consistent in tracking your hours and the types of information you record. You don’t want to follow your hours for one client in one way and for another client in a completely different way.

Automate the process with software

If keeping track of your hours is causing you undue stress or if you’re having trouble staying consistent in how you track your time, you may want to explore software that will help keep track of your hours. That way, you can focus on working and monitoring your hours without worrying about being consistent with your tracking methods. You can use any time tracking software that you prefer. There are options for freelancers and solopreneurs, as well as options for teams within a company. make sure that the software you choose has the features you need, such as the ability to record your time, track billable hours, and export your data at the end of each week or month.


Keeping track of your billable hours can be one of the most challenging tasks for any business owner. , there are ways to make this process easier. You can create a simple timesheet or use software for time tracking to ensure you’re billing your clients for every hour worked. Beyond that, it’s also essential to keep track of your administrative hours, marketing hours, and hours spent prospecting for new clients because they are as important as the hours you spend on client work. With the correct method, you can track your hours and bill your clients correctly and effectively.
Basil Abbas

Basil is the Founder and CTO at ClockIt. With over 10 years of experience in the products space, there is no challenge that is too big in front of him be it sales, marketing, coding, etc. A people person and loves working in a startup for perfection.