Non-billable

Non-billable refers to activities, tasks, or expenses incurred by a professional service provider (e.g., a lawyer, consultant, accountant, or web designer) that cannot be directly charged to a client. This typically includes administrative work, internal meetings, training, marketing efforts, and other overhead costs essential for running the business but not directly benefiting a specific client in a way that warrants payment. These costs are absorbed by the company, impacting its profitability as they cannot be recouped through direct client billing.

Non-billable meaning with examples

• The lawyer spent several hours on internal training sessions this month; these were classified as non-billable activities. This time, though crucial for their professional development, will not be reflected on any client invoices, as it's an investment in the firm's expertise, not a service provided to a client.
• Our marketing team dedicated a week to creating a new website. This project was deemed non-billable because its purpose was to attract new clients, not to directly perform billable work for an existing one. Its costs are part of our general operating overhead.
• The project manager had to spend the morning on scheduling and managing the team’s assignments. Since it was part of the administrative responsibilities and did not provide direct value to the client, it was entered as non-billable time on his timesheet.
• Before a project commences, the proposal stage can be a lengthy process, this phase is always considered non-billable. Creating proposals often involves significant research, planning, and communication with potential clients.
• During the audit, the accountant spent a lot of time reviewing their internal software documentation. It did not relate to any client projects and thus it was non-billable. The documentation served an internal company need to improve workflows.