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Billable utilisation across professional services fell to 66.4% in 2025, the lowest in SPI Research's history.
On a 30-person team, one percentage point of utilisation is roughly 495 hours a year, or about £54,000 at £110 realised rate. Most firms cannot say where that point went, because only a third of agencies record time while work is happening.
Professional services firms should not all use the same setup. Accounting firms mainly need time records to bill clients, while agencies need them to measure margin on retainers and fixed fees.
Time data matters even when nobody is billed by the hour. It shows what each fixed fee retainer and value-priced engagement costs to deliver, which is the best evidence for pricing the next one.
A standalone time records hours. Time data is most useful when each entry is marked billable or non-billable as it is logged and is linked to the same projects, budgets, rates and invoices as the rest of the firm.
Most professional services firms track time, but they do not all need the same thing from it. An accounting practice uses time records to support invoices. An engineering firm may need them for an R&D tax claim. A creative agency uses them to check whether a retainer is still making money.
Most advice on time tracking for professional services gives every firm the same tips. This guide sets out what each type of firm should record, which metrics to watch and what the published benchmarks say, drawing on what our implementation team sees when firms move their time tracking to Magnetic.
Professional services time tracking is the practice of recording work against the client, project, task and commercial terms it belongs to. The aim is to show what a job is costing, whether the fee still covers it, what can be invoiced and where people have spare capacity to take on more work.
The basic record is the same almost everywhere: a person, a date, a duration and a description. What differs is the extra detail each type of firm needs. An accountant may need to select an engagement and a service line. An engineer may need to record a project phase, a discipline and an R&D category. An agency team may need to identify a campaign, a deliverable, a retainer allowance or an extra client request.
If every entry is coded as "client work", the firm cannot tell which projects are over budget. Record enough detail to make decisions but not so much that people put off entering their time.
Start by working out who will rely on your time records. It is usually one or two of these:
If clients or tax authorities rely on the records, you need approvals , locked periods and an edit history. If the records are mainly for internal reporting, focus on making entry quick and comparing actual hours with the planned budget.
People are the main delivery cost in most professional services firms. When their time is missing, late or attached to the wrong job, several other numbers become unreliable at once.
Recent benchmarks show the scale of the problem. SPI research's 2026 Professional Services Maturity Benchmark based on 509 organisations, found that billable utilisation fell to 66.4% in 2025, the lowest point in SPI's surveying history. Deltek's summary of the same report puts average project margin at 37.7% and average revenue loss at 4.5%, with top firms using automation to keep loss below 3%.
Surveys define utilisation differently, so compare each figure with its own sector and trend rather than across rows.
Use these figures as context rather than targets, and set utilisation targets by role. Even small changes are worth money. Take a 30-person team with 1,650 hours available per person each year. One percentage point of utilisation is 495 hours. At a realised rate of £110 an hour, that is £54,450, before anyone has changed a price or won a client. Our utilisation rate guide covers this calculation in more detail.
Late time entry is a big part of the problem. In Magnetic's Agency Benchmarking Survey of Agencies, only 33% record time while working on a task. Another 19% log it at the end of the day, 11% at the end of the week, and 9% do not track time at all. Frederik J. Esposito Jr., Chief Operating Officer of the law firm Rivkin Radler, wrote in the American Bar Associations's Law Practice Magazine, that a one-week delay in time entry can lose up to 20% of billable time, and more than 50% beyond a week. He does not cite a study, so treat this as an estimate. In our experience, the pattern holds: the later time is entered, the more of it is lost to time leakage.
The table below sets the four sectors side-by-side. The benchmark and billing model figures come from the sources in this guide. The rest is our recommendation based on what each sector's time records have to prove.
This is why a generic employee timesheet is often not enough.
Accounting firms mainly use time records to bill clients. Hourly billing is still the most common approach at US firms: the 2025 MAP Survey of 1,073 firms found 63% bill by the hour, though value billing (30%) and fixed pricing (29%) have each grown by four to five percentage points since 2022.
Fixed pricing does not remove the need for timesheets. When a tax return or monthly bookkeeping package is sold at a fixed price, time records show what the price costs the firm to deliver. Ron Baker of VeraSage, the best-known critic of the billable hour, said of firms that stick with it, in an interview with Going Concern: "They'd rather be precisely wrong than approximately right." He has a point about billing. But a firm that stops recording time altogether has no way of knowing whether its fixed prices make money.
Realisation and work in progress deserve s much attention as utilisation. The MAP survey puts firm-wide utilisation between 48.1% and 61.5% across its fee bands, and median realisation falls from 100% at the smallest firms to 87.5% above $10 million in fees. Rosenberg Associates' 2025 survey shows the pressure on hours too: the share of firms whose staff average charge hours in the 1,500's fell from 14.9% to 8.5%. High recorded hours do not help if the firm writes them off, bills late or spends senior time on work priced for a junior role.
Engineering and architecture firms need time records for client billing and, if they claim R&D tax relief, for HMRC or IRS. Margins are tight. Deltek's 2026 Clarity study of 896 A&E firms reported utilisation just under 60% and operating profit down to 16.7%;
A project can be within it's total fee while one phase has already used most of its allowance. If concept design consumes hours meant for detailed design, the project total will not show it until its too late. Comparing planned and recorded hours by phases, lets the project manager act earlier, and a history by discipline shows which parts of a fixed-fee bid are usually underestimated.
R&D tax claims are where estimated time causes the most problems.
HMRC lists staff timesheets among the records it may find useful when examining a claim, and notes that its list is "indicative not mandatory". Its guidance on staffing costs adds that where only part of a person's work is R&D, "only that proportion of their staffing costs can qualify".
IRS: courts "will allow the use of an estimation method only where the taxpayer does not have contemporaneous records, "and the service "does not have to accept estimates of qualified research expenses if documentation exists to verify the actual amount."
Neither authority prescribes a timesheet format, and a timesheet alone does not prove that work qualifies, so take advice from a qualified tax professional. Both expect the R&D share of each person's time to be supported by records made at the time. If engineers flag qualifying work on each time entry and the project lead reviews it, the firm has evidence ready when it prepares the claim.
One of the top-ranking search results for "engineering time tracking" is a Reddit thread from mechanical engineers asking how to get colleagues to do their timesheets at all. Engineers often push back because they are asking to log time in six-minute blocks that nobody uses, while the phase and variation detail that matters is missing. Ask for fewer, more useful fields. Let people choose how they enter time, but keep the phase and discipline codes fixed.
If you need a practical way to set utilisation targets, our guide on the resource utilisation formula for engineering firms explains how to set them by role rather than applying one benchmark across the business. Magnetic helps engineering firms and architecture practices connect recorded time with project budgets and invoicing, so they can spot over-servicing before it starts impacting margin.
Agencies do not track time only for billing, on retainers and fixed-fee projects, the fee stays the same whether every hour is recorded or not. What changes is the accuracy of the project margin. Missing or late time entries understate delivery costs and can make unprofitable work look healthier than it is.
Promethean Research found that the average digital agency earned a 13% after-tax net margin in 2025. Its latest research also found that only 59% of agencies tracked individual project margins. Accurate time data helps agencies understand whether non-billable hours are going towards planned business development and internal work or unpriced scope creep.
Agencies seldom run a single billing model. Promethean Research found that the most common approach is usually a mix of time and materials, fixed bid and retainer, with only 8% or fewer agencies relying on a single model. The same timesheet has to show billable hours, fixed-fee cost against budget and retainer usage. Time entry also needs to suit creative work: timers for focused production, calendar pre-fill for meetings and reviews, and quick end-of-day entry for people juggling short tasks. Team Leads should review exceptions, not every line: a retainer nearing its allowance, an incomplete week, or a job burning budget faster than deliverables are completed.
Different billing rates cause problems too. At Happy Friday, a Cape Town creative agency, the old process of tracking time forced the team to duplicate tasks to get people on the correct rates.
Time tracking had always been a challenge for us, and we were constantly having to duplicate tasks just to get the right people assigned to the right rates. It was time consuming and prone to error." - Sarah Slater, Operations Director
After moving to Magnetic, where several people can be assigned to one task with their own time allocation and billing rate, Happy Friday cut admin by 30% across task creation, time reconciliation and team coordination.
Whatever your sector, these practices apply
When you compare software, check how time moves from a planned task to an approved invoice, not just how the time works. A standalone tracker is enough for a solo practitioner billing a single rate. Fixed fees, retainers, and mixed billing usually need time connected to budgets, rate cards, approvals and invoices in one system. In Magnetic, time entries use the same clients, projects, budgets and rate cards as the rest of the platform: Timers, task entry or Google Calendar and Outlook, pre-fill capture the time, reminders and period locks keep it complete, and approved hours flow into invoices at the right rate.
Each type of firm needs time data for a different reason: accountants to bill clients, engineering firms to support R&D claims, agencies and consultancies to bill and check margins. In every case, time entered late or from memory, is less reliable. Decide what each entry needs to record. ask people to log time on the same day, and connect it to your budgets and invoices. To see how this works with your own clients and rates, start a free 14-day trial of Magnetic, or book a demo and we'll walk through it for your sector.
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Professional services time tracking is the practice of recording work against the client, project, task and commercial terms it belongs to. It supports invoicing, project costing, utilisation, resource planning and future estimates. The detail recorded should match how the firm scopes and bills its work, such as engagements in accounting, phases in engineering and retainers in agencies.
It depends on the sector, role, definition. SPI research measured average billable utilisation across professional services at 66.4% in 2025, the lowest in its history. Deltek puts architecture and engineering firms just under 60%, and the 2025 US Map survey puts accounting firms between 48.1% and 61.5% firmwide, depending on size. Set targets by role and compare against your own trend.
Log time daily against the client, the engagement and the service line, mark each entry billable or non-billable , and route timesheets through an engagement manager or partner review before anything is invoiced. Record a reason whenever time is written off, and keep tracking under fixed fees, because the data becomes the cost of delivery.
Magnetic makes time tracking frictionless. From one-click logging and real-time updates to Timeboost automations that capture hours in the background, Magnetic helps firms log time accurately without slowing anyone down. Link every entry to projects, tasks, and budgets, then turn that data into insight with built-in dashboards, billable vs. non-billable breakdowns, and live utilisation tracking.
Communicate the value to the team: accurate tracking leads to fairer workloads, better planning, and fewer fire drills. Keep it simple, automate reminders, and avoid adding admin. Choose tools that integrate seamlessly into daily work rather than disrupt it.
Yes. Magnetic allows you to tag time by category, so you can distinguish between billable, non-billable, and internal time. This helps with more accurate reporting and better resource planning.
Magnetic is an all-in-one workflow management platform designed and built for professional services firms.
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