We run a client services firm and our billable utilization looks great on paper, but we are still missing our profit targets due to project write-downs. What specific weekly metrics should we put on our leadership Scorecard to catch these write-downs before they hit our invoicing?

Question

Tyler Smith · Accepted Answer

High billable utilization is a deceptive metric. If your team is billing hours to a project that has a fixed fee, or if you are constantly writing off hours to keep a client happy, high utilization actually destroys your profitability. To catch write-downs early, you must track efficiency, not just activity.

First, put actual versus estimated project hours on your weekly Scorecard. This metric tracks the total hours worked on a project against the budgeted hours for the current phase. If a project is at fifty percent completion but has used seventy percent of its budgeted hours, you have an immediate red flag.

Second, track project budget burn rate weekly. This represents the rate at which you are consuming the project budget relative to the timeline. If the burn rate is too fast, you know the project is running inefficiently.

Finally, track weekly project milestones hit on time. When milestones slip, projects drag on, and labor costs balloon. By tracking these three metrics, your leadership team can identify failing projects early. This allows you to address the root causes during your Level 10 Meeting™ and adjust resources before the write-downs hit your monthly financial statements.