Blog · Board and management reporting · Consulting and advisory
The complete utilisation and realisation calculation on five consultants, small enough to check by hand: available and chargeable hours from the roster and time entries, utilisation, fees billed on each consultant's hours from bills allocated by engagement, chargeable hours at standard rate, realisation, the two fixed-fee engagements that have overrun and the share of each consultant's hours on them, the four quadrants, and the identity that hours and fees sum to the firm's, so a reader can reproduce every figure and then run it on their own practice management exports.
Utilisation and realisation are two ratios per consultant from the same time entries, and on five consultants both can be worked by hand. This page works the hours, the fee allocation, both ratios, the overrun engagements, the quadrants and the identity.
Standard rate: $200 an hour.
| Engagement | Fee type | Budget hours | Hours to date | Billed | Realised rate per hour |
|---|---|---|---|---|---|
| E-1 | Fixed, $80,000 | 400 | 640 | $80,000 | $125 |
| E-2 | Fixed, $50,000 | 250 | 410 | $50,000 | $122 |
| E-3 | Time and materials | 600 | $120,000 | $200 | |
| E-4 | Time and materials, 10% discount | 350 | $63,000 | $180 | |
| Total | 2,000 | $313,000 |
Firm chargeable hours this quarter: 2,000. Billed fees: $313,000.
Available: 480 each.
| Consultant | E-1 | E-2 | E-3 | E-4 | Chargeable | Utilisation |
|---|---|---|---|---|---|---|
| A | 260 | 100 | 90 | 0 | 450 | 94% |
| B | 0 | 0 | 260 | 100 | 360 | 75% |
| C | 180 | 110 | 0 | 0 | 290 | 60% |
| D | 0 | 0 | 250 | 30 | 280 | 58% |
| E | 200 | 200 | 0 | 220 | 620 | 129%: over available; overtime |
| Total | 640 | 410 | 600 | 350 | 2,000 |
Hours sum to 2,000. Identity holds.
Consultant's fees on an engagement = engagement billed × consultant's hours ÷ engagement hours
| Consultant | Fees | Hours at standard | Realisation |
|---|---|---|---|
| A | 260×125 + 100×122 + 90×200 = 32,500 + 12,200 + 18,000 = $62,700 | $90,000 | 70% |
| B | 260×200 + 100×180 = 52,000 + 18,000 = $70,000 | $72,000 | 97% |
| C | 180×125 + 110×122 = 22,500 + 13,420 = $35,920 | $58,000 | 62% |
| D | 250×200 + 30×180 = 50,000 + 5,400 = $55,400 | $56,000 | 99% |
| E | 200×125 + 200×122 + 220×180 = 25,000 + 24,400 + 39,600 = $89,000 | $124,000 | 72% |
| Total | $313,020 ≈ $313,000 | $400,000 | 78% |
Fees sum to the billed total within rounding. Identity holds.
Norm: utilisation 72 percent, realisation 88 percent.
| Consultant | Utilisation | Realisation | Quadrant |
|---|---|---|---|
| A | 94% | 70% | Busy, unprofitable: 80% of hours on overrun fixed fees |
| B | 75% | 97% | Busy, profitable |
| C | 60% | 62% | Underused, discounted: all hours on overruns |
| D | 58% | 99% | Underused, well billed: bench time; sold work profitable |
| E | 129% | 72% | Overloaded, unprofitable: overtime on overruns |
| Engagement | Overrun | Hours over budget | Cost of overrun at standard |
|---|---|---|---|
| E-1 | 160% | 240 | $48,000 |
| E-2 | 164% | 160 | $32,000 |
Eighty thousand dollars of hours the firm delivered and could not bill, carried by A, C and E.
Utilisation as the measure. A is the star; E is the hero; D is on the bench.
Fees not allocated to hours. Realisation at engagement level only; nobody knows A carried it.
Fixed fees excluded. Realisation reads 100 percent everywhere except E-4's discount.
E's 129 percent unread. Overtime on work that does not bill.
The same allocation per consultant per engagement, the same two ratios, per practice, with the norm from the firm's own attainers. Covirage runs it on the time entries, bills and roster every month. The utilisation against realisation guide covers the measure, and the leverage drift guide covers the other reason a fixed fee overruns.
Per engagement: the engagement's billed fees times the consultant's share of the engagement's hours. A fixed-fee engagement billed at $80,000 with 640 hours worked realises $125 an hour, and every consultant's hours on it carry that rate. Time-and-materials engagements billed at the standard rate realise 100 percent, less any discount.
Because 80 percent of their hours are on the two overrun fixed fees. Every extra hour there is chargeable and none of it bills. Utilisation counts the hour; realisation says the firm paid for it.
The firm's own attainers: consultants whose engagements were profitable over the year, here at about 72 percent utilisation and 88 percent realisation. The four quadrants are read against those two figures.