Realisation Rate Calculator NZ
This realisation rate calculator measures how much of the time your firm records actually turns into money in the bank. Every hour on a timesheet has a value at your standard rate, but not all of it reaches an invoice: some is written down because the job ran long, some is discounted to keep a client happy, and some is left off altogether. Then not every invoice is paid in full. Realisation puts a percentage on each of those leaks so you can see where the money goes. You enter the hours recorded for a client, a job or a period, your standard hourly rate, the amount you billed for those hours and the amount collected against those bills. The calculator gives you the value of the time recorded, billing realisation, collection realisation, overall realisation and the effective hourly rate the work actually earned. A low billing figure points at estimating, scoping or write-downs; a low collection figure points at credit control and payment terms. For the numbers to mean anything, the billed and collected amounts need to relate to the same hours, not a period's cash that includes older invoices. It is built for practices, consultancies, agencies and trades firms that bill clients for time and materials.
From the same team as Calculate.co.nz
Your Timesheets at jobtracker.co.nz logs your hours on a week grid or a timer that keeps counting when your phone locks, free on every plan. Career and Timesheets turns those hours into projects and rates, fixed fees and retainers, numbered invoices with GST only when you are registered, expenses and mileage, and the tax to set aside, from $4.99 a month billed yearly.
Log your hours freeHow it works
The value of time recorded is the hours recorded multiplied by your standard rate: what the time would have earned if every hour were billed at full rate and paid. Billing realisation is the amount billed divided by that value, so the gap below 100% is the time written down or written off before invoicing. Collection realisation is the amount collected divided by the amount billed, so its gap is what was invoiced and not paid. Overall realisation is the amount collected divided by the value of the time, and it equals the other two multiplied together. The effective rate achieved is the cash collected divided by the hours recorded: the hourly rate the work really earned.
Amounts are best entered on the same basis throughout. If your standard rate excludes GST, enter the billed and collected amounts excluding GST as well, or the percentages will be overstated by the tax.
Worked example
A team records 1,200 hours on a client's work at a standard rate of $180 an hour, so the time is worth $216,000. After write-downs, $180,000 is billed, a billing realisation of 83.3%. The client pays $171,000 of that, a collection realisation of 95.0%. Overall, $171,000 of $216,000 is realised, which is 79.2%, and the 1,200 hours earned an effective $142.50 an hour against the $180 standard rate.
| Step | Amount | Lost at this step | Realisation |
|---|---|---|---|
| Time recorded, 1,200 hours at $180 | $216,000 | ||
| Billed | $180,000 | $36,000 written down | 83.3% billing |
| Collected | $171,000 | $9,000 not collected | 95.0% collection |
| Overall | $171,000 of $216,000 | $45,000 in total | 79.2% overall |
Related calculators
- Utilisation Rate Calculator: the share of working hours that are billable in the first place.
- Unbilled Time Calculator: revenue lost to work that never reaches a timesheet.
- Work in Progress Calculator: the value of time done but not yet billed.
- Late Payment Cost Calculator: what slow-paying clients cost you.