Accurate tracking and billing time is crucial for ensuring profitability and trustworthiness to your clients. For billable freelancers looking to ensure fair payment for their work; agencies that are working on multiple projects at once; or lawyers who rely on strict billable hours to ensure correct billing procedures, the right billable hours tracking software enhances your productivity and minimize errors.
This guide will walk you through everything you should know about using billable hours tracking software, and will help you find a solution that best meets your needs, workflow, and goals.
What Are Billable Hours?
Billable hours are for time spent on client work that is chargeable. All aspects of which are defined here including project work; consulting; meetings; research; and communications. These are the minutes and hours that have direct revenue generation.
Examples of Billable Hours:
- Designing a website or writing code on a project for a client
- Researching and analysis on a consulting project
- Drafting legal documents or preparing a case file
- Client meetings or project reviews
Non-Billable Hours:
- Internal team meetings
- Marketing and business development
- Administration; scheduling; client invoices
- Employee onboarding, training, and development
Tracking both billable and non-billable hours are useful to optimize your work process and revenue.
What Is Billable Hours Tracking Software?
Billable Hours Tracking Software is a digital means of tracking time associated with a task or project that can be billed to a client. Billable hours tracking functionality typically includes the following features:
- Time tracking through real-time timers or manual entries
- Assigning tasks to projects and clients
- The automatic generation of invoices
- Reporting and analytics
- Integrations to accounting, CRM and PM software
The purpose of billable hours tracking platforms is to automate the time logging process, ensure accurate billing, and allow visibility of where your time is being spent.
Why Billable Hours Tracking Matters
Here are five main reasons why tracking billable hours accurately is essential:
1. Increase Revenue
When you accurately keep track of every minute of billable time, you know you’ll be compensated for every hour of time you spent working. Even when you may know you’re underreporting time by small amounts here and there, these little underreported hours add up to a lot at the end of the year. When you track them correctly, you are recording billable time that will go directly to your revenue.
2. Increase Client Trust
The last thing a client wants to hear is, “I think I’ve worked that many hours…”, or worse yet, “I think I recharged your credit card that amount?” Clients appreciate transparency wherever they can get it and being able to provide them detail on how you’ve spent your time builds trust. Once they see a clear breakdown of where they paid for your time, they’ll see how you’re spending your time and managing their expectations will be easier and have less chance of misunderstandings or disputes related to billing.
3. Evaluate Profitability
Billable hours tracking software allows you to evaluate your most profitable clients, and projects. Tracking billable hours will show you areas where you spend a lot of time without appropriate compensation; thus you can make better decisions related to pricing and resource allocation.
4. Optimize Workflow
The relationship between billable hours tracking workloads is seamless when it is paired with project management software; they become entirely integrated into your workflow. By having this integration, you eliminate the non-billable time you spend tracking time manually and reduces the likelihood of errors, and ensures that every task is tracked correctly. Overall operational efficiency will be improved with better time tracking.
5. Legal Compliance
Although most professions need to track billable hours, compliance is extremely important for law firms or businesses in regulated industries. Most of the needs for detailed time logs are to support an audit, to ensure you are billing correctly and meeting industry compliance standards. This can help protect your business from any compliance issues.
Key Features to Look For in Billable Hours Tracking Software
When choosing a solution, prioritize the following features:
1. Time Tracking Tools
Billable hours tracking software should have numerous ways to accurately track time:
- Start/Stop Timers: Tracking that is all about real-time tracking, where to start the track time when you begin, and stop when you finish.
- Manual Entry Support: Manual add time for those tasks that you may forget to log.
- Idle Time Detection: Automatically detect when the user has been idle so you can reserve against errors.
- Mobile and Desktop Apps: The ability to track time regardless of device as people have become more flexible in work.
2. Client and Project Administration
Billable hours tracking software help organize meeting and time spent with clients and projects:
- Assign Hours on Clients and Projects: Record billable hours and present to clients or projects automatically..
- Task Trackers: Record time for specific tasks, within projects, for more accurate reporting and invoicing.
3. Invoicing Functions
Billing software for tracking billable hours should remove unnecessary complexity from invoicing:
- Auto-generate Invoices: Automatically generate invoices based on hours tracked.
- Brand Templates: Change your invoices with your branding.
- Currency and Tax Support: Support multiple currencies and taxation for international clients.
4. Analytics and Reporting
Get deeper insights into your time and the performance of your business through reporting:
- Billable vs Non-billable Hours: Measure the amount of time you spent on tasks that generate income and tasks that are internal.
- Productivity Reports: Measure your time usage so you can measure efficiencies to streamline tasks.
- Profitability Reports: Measure the profitability of your clients or projects to see what is most profitable.
5. Team Management
Manage your team’s time effectively and have visibility in to time/accurately capturing it:
- Timesheet Approvals: Allows manager/approvals/review timesheets prior to billing.
- Hourly Rate Configuration: Rate on different terms for different team members, rates for different clients.
- Monitor Workload management: Reports on team activity and workloads to see if you have over- allocated hours.
6. Integrations
Make sure your billable hours tracking software integrates with other essential tools.
- Accounting Tools: Connect to save time managing your books in QuickBooks or Xero.
- Project Management: Integrate to your project management tool with Asana, Trello, or Jira to track time more easily.
- Calendar Sync: Sync it to Google or Outlook and track your time from your meetings.
7. Security and Compliance
You want to make sure you abide by data security and compliance regulations:
- Access Permissions (role based): Have control or limits based on an employee’s access (i.e. limit access to sensitive time tracking data).
- Encrypted Storage: You want to encrypt your client data.
- GDPR/HIPAA Compliance: Be sure to comply with legislation related to various laws like GDPR and HIPAA.
Top Benefits for Different Professions
For Freelancers
For freelancers who want to improve their workflow and make sure they’re getting compensated fairly, billable hours tracking software is a necessity:
- Timely and Fair Payment: By tracking all time worked, you can avoid undercharging for your work to ensure you’re compensated for all your efforts.
- Time Analysis by Client or Service: Include an analysis into how much time was spent on each client/service, allowing you to price accordingly or analyze profitability.
- Invoice Automation: Automatically generate invoices based on the hours tracked, saving time and minimizing errors.
Greater Professionalism and Trust: Share accurate and transparent reports with clients to instil trust in the client service relationship and maintain a professional image.
For Agencies
Agencies that manage multiple projects and teams can leverage billable hours tracking software to gain control of time spent and increase profitability by:
- Track Time on Multiple Projects and Teams: Know how much time is being spent across several clients and teams to ensure proper billing and allocation of resources.
- Optimize Billable Hours per Resource: Monitor the amount of hours your team members have reported to measure and maximize how productive they are, which generates more billable hours, therefore more revenue.
- Increase Project ROI Using Real-Time Data: Manage your project with real-time data and take action when you identify an opportunity for improvement, therefore maximize return on investment.
- Balance Workload and Availability: Measure your team members availability to ensure they are not too overloaded and therefore maximize productivity.
For Businesses
Billable hours tracking software is a tool that can be implemented by businesses of all sizes to improve productivity, efficiency and profitability, in a variety of important areas of the business:
- Know Department Efficiencies: You can track how long each department spends working on a project to understand performance and allocate your resources better.
- Integrate Time Data into Payroll; You can link billable hours with payroll software and ensure employees are paid for recorded time.
- Track Project Costs: You can utilize recording billable hour costs to track costs of time on projects to help you more clearly gauge if you are adhering to project budgets and if projects are indeed profitable.
- Discover Areas for Improvement: You can find inefficiencies when you analyze the time logs, as well as find bottlenecks and instances to improve processes.
For Law Firms
Billable hours tracking software can help firms comply with legal billing practices by enhancing efficiency and accuracy for law firms:
- Track Every Billable Minute for Clients: Effectively record time spent on client matters to ensure your firm will not lose or un-billable minutes.
- Track Time by Matter or Case: Efficiently categorize time by legal matter or case, to give you an accurate and detailed breakdown, at billing time to your clients, and for your firm’s reporting.
- Differentiate Billable and Non-Billable Hours: Differentiate billable and non-billable hours, and sub-categorize billing, as necessary to comply with client mandates.
- Comply with Legal Billing: Remain compliant and defendable with legal billing regulations and ethical standards by keeping a complete and accurate time log as your firm may be audited at any time.
- Integrate with Other Legal Practice Management Systems: Integrate or interface with other legal practice management systems such as Clio or LEAP for case management and billing in one seamless location.
How to Choose the Best Billable Hours Tracking Software
When assessing tools, ask the following questions:
- Is it easy/intuitive to use in your everyday activity?
- Does it allow for multiple billing rates?
- Can it scale with your company?
- Does it integrate with the tools you are currently using?
- Is customer service responsive and available?
Pro tip: Most tools have a free trial offer – use this to check which tool fits your workflow the best.
Common Mistakes to Avoid
Using Memory to Track Time
Using memory to track time leads to lost hours and inaccuracies. Without billable hours tracking software, important revenue-related details can easily be forgotten.
Forgetting to Track Non-Billable Hours
Forgetting to track non-billable hours, for example: meetings and admin work, may result in not getting the true picture of profitability. The most accurate way to figure out how time is being allocated is to track time accurately.
Using Different Software to Track Time and Invoicing
Using disjointed software for time tracking and invoicing prohibits you from submitting invoices that are timely and more importantly, accurate. Integration makes processes flow together, minimizing inefficiencies.
Not Reviewing Reports from Time Tracking to Increase Efficiency
Not reviewing your time tracking reports means you are missing the opportunity to understand your workflow better. Frequent review of those reports will allow you to identify workflow inefficiencies, and how you can properly allocate your resources more efficiently.
Best Billable Hours Tracking Software in 2025
1. Tivazo
- Best for: Freelancers and small teams
- Features: Real-time tracking, report generation, live screenshots
2. Harvest
- Best for: Agencies
- Features: Time tracking + invoicing, project budget tracking
3. Clockify
- Best for: Budget-conscious users
- Features: Free forever plan, unlimited users, reports
4. Clio
- Best for: Law firms
- Features: Matter-based billing, legal compliance, trust accounting
5. Everhour
- Best for: Teams using Asana/Trello
- Features: Embedded time tracking, visual dashboards
Action Steps
- Assess your current time tracking process
- Identify your 3 most important tasks (i.e., the most important may be invoicing, reporting, integrations)
- Try 2-3 products with their free trial versions
- Commit to tracking regularly for 30 days
Future Trends in Billable Hours Tracking
- AI Time Predictions: Predicting how long tasks will take, based on task history
- Automated Entries: Time automatically tracked through your calendar, email or project management tools
- Blockchain Time Logs: Time logs that can be validated and are secure from tampering
- Voice-activated Entry: No-touch time entry solutions for the busy professional
Final Thoughts
The accurate Billable Hours Tracking Software can completely enhance how you work with your clients, improve your workflow, and dramatically improve your income/ bottom line. The best tools are basic, precise and fit in with the systems you are already using. You may track 10 hours or 10,000: it all starts with the right system.
If you’ve never used Billable Hours Tracking Software, there’s no better time than the present.
Are you ready to take control of your time and your income? Try leading Billable Hours Tracking Software for free and discover a whole new way to work.