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Why it’s Important To Have Utilisation Targets

Sydney Outsourced CFO Thomas Taylor - Wednesday, October 08, 2014

The standard utilisation target for services businesses is 80% of available time.   

That means that 80% of standard hours need to be recorded against a billable project/job.   So if an employee’s standard hours are 40 hours a week and they are on leave for a day their available hours are 32 and their target is 80% of that, 25.6 hours.

The utilisation target has to balance time for important non-billable activities such as marketing and management with producing income for the business.

It’s important to remember that not all time recorded against a project can always be billed.  Adjustments often need to be made for things like bringing new employees up to speed.

Utilisation reports should be produced and reviewed every Monday.  They should show the previous week, month to date and year to date.  They should also show average hourly rate as well as revenue against plan.


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