STANDOUT agencies focus on recovery

STANDSTILL agencies focus on delivery.

STANDOUT agencies focus on recovery.

With staffing costs at all time highs and clients’ cutting and/or delaying spend. There has never been a better time for you to focus on efficiency.

Unlike market rate salaries and client decision-making, the efficiency of your agency is within your complete control. Don’t ignore the opportunity to use this to your advantage.

For most of us, improving efficiency means better management of time. Which means accurately recording time. Which means timesheets(!)

To be a STANDOUT agency you need to know 3 numbers related to time (many agencies I know don’t even know the first one):

1. Utilisation Rate (UR) – The hours of billable time you delivered and recorded expressed as a percentage of total hours available.

2. Realisation Rate (RR) – The billable hours you ACTUALLY billed to clients (at the correct rate) expressed as a percentage of billable time.

3. Recovery (R%) – Your efficiency. UR x RR / 100 = R%

You need all 3 numbers to be as high as possible. Ideally your Recovery should be 100% i.e. of the billable hours you do, 100% of them should be landing on invoices.

A quick example:

If my agency is recording 3/4 of our total working hours as billable, my UR is 75%.

If I am over-servicing or taking too long on some projects/clients, then not all my billable hours will be landing on invoices. My RR might be – say – 80%.

My Recovery % is therefore is only 60% (75 multiplied by 80 divided by 100).

To increase your R% you need to make sure all your billable hours are translating into invoices.

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