Glossary
Realisation Rate
Also known as: Realization rate, billing realisation
Realisation rate is the percentage of hours worked on client engagements that is actually invoiced to the client. It is calculated as hours billed divided by hours worked. A firm that works 120 hours for a client but invoices 102 has an 85% realisation rate — the other 18 hours were written off before the invoice went out.
Realisation sits between utilisation and revenue. Utilisation asks whether people are doing client work; realisation asks whether that work survives to the invoice. Hours die between the two for predictable reasons: overruns beyond the estimate, rework absorbed to keep the client happy, small unscoped requests, and time recorded too vaguely to defend at billing review.
Professional-services benchmarks treat 85–95% as healthy. Below 80%, roughly one day in five of client work is unpaid — which usually points at scoping discipline and record quality rather than pricing. Because write-offs happen quietly at month-end, most agencies never see the number unless they measure it deliberately.
The strongest lever on realisation is the credibility of the time record. Hours logged as the work happens, attributed to a named deliverable and approved by a lead within days, survive invoice review; a month-end block of reconstructed hours gets trimmed because nobody can stand behind it line by line.
How Workclave handles this
Workclave's session records are contemporaneous by construction — started when the work starts, linked to a project, approved in-week. That is precisely the evidence that stops invoice-time write-offs, and the worked-versus-billed comparison becomes a report instead of a forensic exercise. realisation rate calculator.
Related terms
Utilisation rate is the percentage of an employee's available working time that is spent on billable client work. It is a core efficiency and profitability metric for IT services firms and agencies. A higher utilisation generally means more of your paid capacity is generating revenue.
Read definition →Billable hours are the units of work time that can be charged to a client under a contract or engagement. They exclude internal activities like admin, training, or bench time that the client does not pay for. For services firms, billable hours are the direct link between effort and revenue.
Read definition →Revenue leakage is value the firm earned but never invoiced: hours worked and not recorded, recorded and written off, covered by scope the contract never priced, or billed at rates that were never escalated. Unlike a lost deal, leakage is invisible — the work happened, the cost was paid in salaries, and the revenue simply failed to appear.
Read definition →A write-off is recorded work removed or reduced before invoicing — hours the team spent that the client is never asked to pay for. Write-offs happen at billing review, when a partner or account lead trims entries that overran the estimate, look indefensible, or would trigger an awkward conversation. The difference between hours worked and hours billed is the firm's realisation gap.
Read definition →Effective hourly rate is the money actually collected from a client or period divided by every hour worked to earn it, including non-billable time. It is the truest measure of what work earns: a studio quoting ₹1,800 an hour that collects ₹3,00,000 for 220 hours of total effort has an effective rate of about ₹1,363.
Read definition →