The Afternoon I Realized I Had Two Rates

I have a rate. It is the number I put in proposals and contracts. It is the number I feel reasonably confident about.

About eight months into using a real time tracker, I found out I had a second rate. A lower one. The one I actually earned on most projects after you account for everything I was doing that never appeared on an invoice.

Where the Second Rate Came From

I started running reports. Nothing complicated. Just total hours on a project versus what I had billed.

On most projects, the billed hours matched my logs. I had gotten reasonably good at capturing work sessions.

But the reports also showed me time I had logged that I had not billed for. It was not in any one category. It was spread across small things that I had absorbed as part of doing the work.

Reading project documents before kickoff. Writing internal notes to organize my thinking. Relearning a tool I had not used in a few months. Fixing a problem that had come from a miscommunication I felt partly responsible for. Small rounds of checking my own output before I sent anything over.

None of it felt billable in the moment. All of it was real work.

The Math Was Uncomfortable

I added up six months of unbilled logged hours across all active clients. It came to just under forty hours.

At my rate, that was a meaningful amount of money. Not catastrophic. But not nothing. And it was happening every six months, which meant it was happening every year, which meant it had probably been happening before I started tracking.

The number I had been thinking of as my rate was not actually my rate. My rate was that number multiplied by the ratio of billable to total hours. Once you factor in everything I was doing that never hit an invoice, the actual return per hour of my working time was noticeably lower.

The Honest Part

Some of those hours should not be billed. Fixing your own mistake is not something most clients should pay for. Time spent getting up to speed on a niche topic that benefits your practice in general is not always a client expense.

I am not saying every unbilled hour is a problem.

I am saying that I had never looked at the full picture before, so I had never made real decisions about any of it. I was just absorbing costs by default because I had not seen them.

What I Decided to Change

A few things.

First, I started being more deliberate about what I scoped into a fixed project rate. If prep and review time is real, it should either be in the quoted hours or reflected in a higher rate. Pretending it does not exist helps nobody.

Second, I got cleaner about what counted as billable. I wrote a short personal policy. Not a legal document. Just a page of notes I kept in my project folder about what I would and would not log as client time. Having decided in advance made it easier to apply consistently.

Third, I stopped waiting until invoice day to reconcile my hours. I do a short review every Friday using Time-Trak. I look at what I logged, what is allocated to which project, and whether anything needs to be recategorized before the week closes. Ten minutes. Catches problems before they pile up.

What Two Rates Really Means

If you charge one rate but earn another, you are operating on incomplete information. You might be profitable. You might not be. You genuinely cannot tell.

The time log is the only place where the real rate lives. Not the proposal, not the contract, not the number you quote confidently in a sales call.

Look at the log. Do the division. Find out what you actually earn per hour of actual time spent.

That number might be fine. But you should know what it is.

Track your time, bill every minute.

Time-Trak is a native Mac and Windows time tracker with a floating timer, automatic screenshots, and one-click invoicing.

Free during beta.

macOS + Windows · Floating widget · Auto screenshots