Struggling with Billable Hours Expectations at MSP
Posted by Cozmo_Stef@reddit | sysadmin | View on Reddit | 18 comments
Hi everyone,
I’ve been working at an MSP for about two years now. I started in a support role but have since grown into a dual position as a Digital Coach and Project Engineer, with a focus on M365 and automation. I enjoy the variety, as I also provide support and occasionally act as the “joker card” for sales—essentially doing some pre-sales work (roughly 2 meetings per week).
However, since the beginning, I’ve been deeply concerned about meeting the company’s billable hours expectations. The official target is 80%, but I usually hit around 60-65%, depending on whether I’m actively working on a project or not. On most days, I try to make 5 out of my 8 working hours billable, but that still leaves me below the required target.
This high threshold feels unreasonably stressful for me. On the days when I come close to meeting the target, I feel like I’m working under constant pressure, obsessively focused on maximizing my billable hours. It’s draining and leaves little room for the other aspects of my role that I genuinely enjoy.
It hasn’t been directly addressed with me yet, but it’s brought up during meetings with management, where I’m asked why my billable hours are “so low.” I’m starting to wonder—are such high expectations normal across the industry? Am I the only one struggling with this, or is this a common issue?
If you’ve experienced something similar, I’d love to hear your tips on how to handle this situation. How do you balance these kinds of requirements while still enjoying your work and maintaining your mental health?
Thanks in advance!
SmallBusinessITGuru@reddit
Being pretty new to MSP you likely are missing billable time or time you can ascribe to billable.
If you do any research, it's attributable to a customer. You personally as an MSP employee never learn anything for free. Only learn on the customer's dime. So if someone asks me about Microsoft Planner, I bill them no less than 15 minutes for asking that question.
Time entry and updating tickets is billable to the customer. You personally as an MSP employee never touch your keyboard unless a customer is paying for the time. So if I get a ticket for a simple problem that takes me 15 minutes to resolve, the billable time is 30 minutes. 15 to do the work, 15 to document.
Always round up. If you work for 40 minutes on a customer problem, enter your time and update the ticket, you put down 1 hour of billable. 40 work, 15 for time entry, and then round up to 60.
Responding to an email, that's time! Bill it. Even if it only takes you 5 minutes, you bill for 15. (I wouldn't bill for just replying to a meeting invite, real replies where you need to think and then type)
Never do internal work unless they provide you with a cost-center to bill against. You don't work for free for the customer when they want Microsoft SQL installed, so why would you work for free for the internal HR department when they want SQL installed. If you take 15 minutes to train someone how to do something, that should be billable to a training cost center.
That pre-sales work you did, how much billable did you assign? If I have a 30 minute meeting with the customer, I would assume at least 2 hours for research and prep. So a meeting with the customer to pitch the idea of migrating to Teams from internal PBX, that's 3 hours of time. Round UP!
Do two things at once! Take project work, begin work. Grab service tickets to do while waiting for installs. Bill the same time to two customers. Never start one task when you can start two or three. This is MSP, quantity has a quality all its own.
With the exception of internal meetings to discuss internal non-customer related issues, it's all billable.
ChknMcNublet@reddit
Do you just put it as "research" in your ticket notes?
awit7317@reddit
This person MSPs 😀
BeagleBackRibs@reddit
Normal for an MSP but 80% billable is insane
SmallBusinessITGuru@reddit
80% being actual working on issues would be pretty impossible to reach. If you're tracking time properly 80% is really easy to reach.
Even lunch can be billed to the customer if you do it right.
thortgot@reddit
Lunch time being billed to a customer? I know MSP people are big of overcharging but seriously?
That's more aggressive than lawyers.
SmallBusinessITGuru@reddit
If you engage me to work in a remote city, you bet that lunch is covered under a per-diem if I get to go have lunch alone.
If that lunch is catered and spent with the team as is often the case, then I'm not off work and you can assume that the time is billable.
And for those businesses with the genius idea of a paid cafeteria where they expect me to pay for the food while also not being able to disengage from the customer, that's both the per-diem, and billable time.
-I would never bill a customer for lunch time when working at home, or from a local office. I might eat my lunch at the desk then to get the day done sooner, but that's beneficial to everyone. I have never and would never bill a customer for time that isn't related to their business or caused by their business.
thortgot@reddit
Billing a per diem =! billing for lunch time.
If it is a working lunch (business discussions occur during it), that's a non issue and I agree is perfectly legitimate to bill out on.
TheRealFisseminister@reddit
Ask yourself “how much is this worth for the customer?”. If you have saved 200 Peoples access to e-mail in 1/2 hour then bill them 4 hours of work, because of the impact it would have on their Company to be without e-mail Access. Also round up every thing you do, so an hours work is billed as 2 hours. MSP is all about squeezing every penny from the customer and crushing your soul in the progress. Might as Well do it on Easy-level with my suggestions.
thortgot@reddit
2Xing your bills is fraud, objectively.
TheRealFisseminister@reddit
Yes it is. But we are talking about MSP work here so moral is of the table. You as an IT manager should know this.
thortgot@reddit
If 2X passed while you only worked 1X and did nothing for 1X it is immoral, in pretty much all other scenarios it's blatantly illegal.
TheRealFisseminister@reddit
Blame it on the High KPI demanded for each employee. Thats why IAC is the go-to solution now Where the customer pays a High fixed Price for a solution, but it only takes a fraction of time to implement. Same principal.
digitaltransmutation@reddit
In this biz they might be saying 'billable' but they really mean 'utilized.'
Download yourself the Toggl or Timely and make sure the stopwatch is always running on SOMETHING, even if you aren't sure what folder you will be filing the time under. Ask manager or a coworker for advice on filing time for things like sales activities and back-office automation. if they arent billable, stop doing them. In an environment where utilization is king, it is imperative that you 'manage upwards' and force the business to value these tasks in the form of assigning a billing code to it.
Pristine_Curve@reddit
Common problem across all professions which do hourly billing. There is always a gap between what is 'billable' and what is 'important'. This gap is primarily the source of stress for most MSP billers. As technical people we often have an extremely difficult time working in a way that we feel is not 'optimal'. To fix your stress, you'll have to remove your own ego/identity from the business outcomes, and focus on what leadership feels is important.
Here are some tips to do handle this:
Refuse non-billable work. All those informal request to 'help', 'train', 'assist'... etc... Doesn't have to be rude, but simply "what is the billing code for this one?" If they don't have one "sorry I need to get my required hours in before I can help with anything non-billable".
Work with management to identify areas which are obviously worth spending time on, but not tracked. Sales Engineer work should definitely have a 'customer development' code that counts the same as billing time.
Use timers. Most billing systems will have a stopwatch style timer which can be used to track time. Get used to always having a timer running. Use this to help decide what to do next from your list. If you have 5 todos and 2 would not justify 'starting a timer' then do the other 3 first.
lechango@reddit
You are likely working a lot more than everyone else with an honest 60-65% billable, everyone else there is probably not honestly putting in more than 4 hours billable a day, they are just fudging their numbers up to 7.
VosekVerlok@reddit
IMO (With over a decade at a MSP after a decade of working IT for FX).
In discussions with the managers/exec, 80% was the maximum reasonably expected from a FT employee.
It depends how they are calculating it too, 7.5hr days, 8hr days, and if your time includes a paid lunch.
- I get a paid lunch (30 mins) and work a 8hr day, lunch alone brings me from 100% to 94%.
- Any PTO, LOA etc.. also counts against your billable hours.
- Over a year i have 10.5% of my total billable time as PTO. - Even if i was billed at 7.5hrs a day 52 weeks a year and never sick, The maximum i can be billable is sub 90%, its closer to 85%.
It really seems that you wear a lot of hats, and switching between them and getting down to actually do billable work. - Assuming you take 5 mins between tasks that is about 2% of your days every time.
- Going from random printer support call to prepared for a pre sales meeting with a customer could be more than 5 mins. - Ensure you are asking for, and accounting for all of the role shifting time/efforts (you could ask for a special code to help track all of it). - Anything you do to help co workers, internal support/tasks etc.. is non billable, so keep that in mind.
Also make sure you are familiar with the rounding of billable hours for your ORG.
- For me depending on the role, that is rounding up to either the nearest 15 mins or 30 mins.
- These 'shaved pennies' can help give you time to prep for and to transition to your next task/role.
That being said, being billable 5hrs of your 8hrs is 62.5%, so it just seems you need to quantify it.
- use your timesheets as a tool to try and find and track it, and if it ever comes up you can say something like:
and also: https://www.linkedin.com/pulse/obituary-billable-hour-tim-williams/
chillzatl@reddit
in the MSP world, that's not an uncommon metric for support staff, but it sounds like you're doing non-billable work as part of your day to day responsibilities. If you're concerned, get ahead of it and bring it up to leadership and get it taken care of. They either need to stop pulling you away from billable work or they need to recognize that you're being asked to do things that aren't billable.
I ran an MSP for 20 years and we had similar metrics, but we recognized anything that benefits the business in a customer facing capacity as billable. Non-billable things were internal work. So any work on our customer facing tool set, documentation management, automation, etc, were all considered billable.