Utilisation is 86%. The invoices carry 71% of it.

Most service firms measure how busy they are and infer margin from it. The gap between the two numbers is where the profit quietly goes.

By Steve 4 min read
Abstract bridge artwork for Utilisation is 86%. The invoices carry 71% of it.

A professional services firm with a utilisation figure it likes will usually treat capacity as the constraint. The team is 86% billable; the answer to more profit is more people, or more hours, or a higher rate card. But there is a second number, and in many firms nobody owns it: the proportion of recorded billable time that actually reaches an invoice and survives to be paid. Call it realisation. When utilisation is 86% and realisation is 71%, the business is converting roughly 61% of its paid capacity into revenue,…

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