How a Professional Services Firm Eliminated $850K in Annual Revenue Leakage
A 65-person professional services firm recovered $850K annually by capturing previously lost billable hours, improved billing realization from 68% to 94%, and achieved 100% billing accuracy with automatic time tracking.
Company Overview
A multi-discipline professional services firm providing business advisory, financial consulting, and strategic planning services to mid-market and enterprise clients. With 65 professionals including partners, senior consultants, analysts, and support staff, the firm manages 100+ active client engagements annually with billing rates ranging from $150 to $500 per hour.
- Professionals
- 65 team members
- Annual Revenue
- $18M
- Active Clients
- 100+ annually
- Location
- Seattle, WA
The Challenge
Massive Revenue Leakage from Lost Billable Hours
- Lost Billable Time
Professionals routinely forgot to log billable hours—especially short client calls, email responses, quick consultations, and internal research. Partners estimated that 20-25% of billable time was never captured, representing approximately $1M in lost annual revenue. Manual timesheet reconstruction at the end of each day led to underreporting and forgotten work.
- Poor Billing Realization
The firm's billing realization rate had dropped to 68%—meaning for every 10 hours worked, only 6.8 hours were billed and collected. This was caused by a combination of lost time, underreporting, and client billing disputes. The low realization rate made it impossible to achieve target profit margins and forced the firm to maintain higher headcount than necessary.
- Client Billing Disputes and Write-Offs
Without proof of work, clients frequently challenged invoices. Write-offs averaged 12-15% of monthly billings due to client disputes and the inability to justify hours billed. This created a vicious cycle—professionals knew clients would dispute hours, so they underreported time preemptively, leading to even more revenue leakage.
- No Visibility Into Revenue Leakage Sources
Leadership had no data on where revenue was being lost. Which professionals were underreporting? Which client types had the most leakage? Which activities were routinely unbilled? Without visibility into the sources of revenue leakage, the firm couldn't implement targeted solutions or hold team members accountable for capturing billable time.
The Solution
Automatic Billable Hour Capture to Eliminate Revenue Leakage
The professional services firm implemented WorkComposer across all 65 professionals with a laser focus on capturing every billable minute, eliminating revenue leakage at the source, and providing proof of work to reduce client billing disputes and write-offs.
- 1. Automatic Billable Time Capture
- Professionals stopped manually logging hours at the end of each day. WorkComposer automatically tracked time spent on client work—documents, emails, calls, research, and meetings. Every billable minute was captured in real-time, including the short interactions and quick consultations that were previously lost. No more reconstruction from memory.
- 2. Real-Time Revenue Leakage Monitoring
- Dashboards showed real-time visibility into billable time capture by professional, client, and service type. Management could identify which team members were underreporting, which clients had leakage issues, and which activities were routinely unbilled. This data enabled targeted coaching and process improvements to plug revenue leaks systematically.
- 3. Proof of Work to Eliminate Disputes
- Optional screenshots and activity logs provided verifiable proof of work performed. When clients questioned invoices, the firm could demonstrate exactly what work was done during billed hours. This transparency eliminated the vast majority of billing disputes and write-offs, allowing the firm to collect payment for hours actually worked.
- 4. Client-Level Profitability and Realization Tracking
- Real-time tracking of billing realization rates by client and professional. Leadership could identify which clients had the best realization and which required attention. This data informed pricing decisions, client relationship management, and resource allocation—ensuring the firm focused on high-realization, profitable engagements.
Implementation
Revenue-Focused Rollout Across All Practice Areas
Started with 8 partners tracking their own time for one week to validate revenue leakage assumptions. The data confirmed that partners alone were losing 3.5 hours per week in unbilled time—representing $140K annually at $800/hour average billing rate. This proof convinced the entire partnership to roll out immediately.
Deployed to all 65 professionals with training sessions focused on capturing billable time and eliminating revenue leakage. Created client project templates and billing categories. Configured proof of work settings to balance transparency with professional privacy. Set up revenue leakage monitoring dashboards for partners and practice leaders.
Within the first month, the firm captured 22% more billable hours than the previous month—representing $70K in recovered revenue in just 30 days. Professionals appreciated not having to remember and reconstruct their day. Client feedback on detailed billing reports was overwhelmingly positive.
By month three, the firm was consistently capturing 26% more billable hours than pre-implementation baseline. Billing realization improved from 68% to 89%. Client billing disputes dropped from 18% of invoices to less than 3%. The firm was on track to recover $850K annually in previously lost revenue.
Results
Transformative Revenue Recovery and Profitability Improvement
- $$850K Annual Revenue Recovered
- By capturing previously lost billable hours, the firm recovered $850K in annual revenue—a 4.7% increase—without adding headcount or clients. Each professional captured an average of 4.2 additional billable hours per week, directly translating to revenue growth. This recovery alone justified 35 years of software costs.
- ↑Billing Realization Improved from 68% to 94%
- Billing realization jumped 26 percentage points—from 68% to 94%—through better time capture (15 points) and reduced billing disputes (11 points). This improvement meant the firm now billed and collected for 94% of hours actually worked, compared to only 68% before. The realization improvement was worth $1.2M annually.
- ✓100% Billing Accuracy Achieved
- Automatic time capture eliminated manual entry errors and reconstruction mistakes. Every invoice was accurate, verifiable, and backed by work proof. Client billing disputes dropped from 18% of invoices to less than 3%, and payment cycles shortened from 52 days to 28 days on average.
- ↓85% Reduction in Revenue Leakage
- Revenue leakage dropped from 25% of potential billable time to less than 4%. The firm plugged systematic revenue leaks by identifying and addressing the root causes—forgotten short interactions, delayed time entry, and underreporting of internal work. Real-time monitoring prevented leakage before it occurred.
- ↑35% Profit Margin Improvement
- With $850K in recovered revenue and minimal additional costs, profit margins improved from 22% to 35%. The firm achieved profitability targets without increasing fees or reducing staff compensation. Partners received significantly higher distributions based on improved firm economics.
- ⏱ROI Achieved in First Month
- At $2.99/user/month for 65 professionals ($194.35/month), the software paid for itself in the first week from recovered billable hours. The first month alone generated $70K in additional revenue, representing 30 years of software costs. Annual ROI exceeded 400,000%.
"We knew we were leaving money on the table, but we had no idea it was $850K per year. WorkComposer exposed the systematic revenue leakage across our firm—forgotten client calls, unreported research time, delayed time entry that led to underreporting. By capturing every billable minute automatically, we recovered nearly $1M in annual revenue and improved our billing realization from 68% to 94%. This wasn't just about better time tracking—it fundamentally transformed our firm's economics and profitability. The ROI was immediate and substantial."
Related Solutions
Explore How WorkComposer Can Help Your Business
Billable Hours Tracking
Capture every billable minute and eliminate revenue leakage with automatic time tracking.
Project-Based Work
Track project budgets and profitability in real-time with accurate time allocation.
Agency Time Tracking
Maximize profitability with project insights and transparent client billing.
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- ✓ Automatic and manual time tracking
- ✓ Real-time productivity reports
- ✓ Web and app usage monitoring
- ✓ Screenshots and attendance tracking
- ✓ Easy team onboarding
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