In Productive, understanding the distinction between "Billable" and "Recognized" time is essential for accurate budget management and invoicing.
Billable Time
Billable time refers to the amount of time logged against a service that could be invoiced to the client.
This applies to both Time and materials and Fixed billing type services.
For example, if an employee works 8 hours on a task and tracks them against a service within a budget, you may decide to charge your client for only 3 hours.
In this case, the 3 hours are considered billable time, while the full 8 hours represent the worked time.
Recognized Time
Recognized time is the portion of billable time that is or will be charged to the client.
For Time and materials billing type services, recognized time equals billable time.
Note: if you add a Fixed cap to your Time and materials services, the recognized time will not exceed the set maximum quantity.
However, for Fixed billing type services, recognized time cannot exceed the set Quantity.
For instance, if a Fixed billing type service is budgeted for 10 hours and 12 hours are logged as billable, only the 10 hours within the budget will be recognized.
The additional 2 hours will not be recognized because they exceed the service agreement.
Important for reporting: In this scenario, you'll still see the 12 hours as billable; however, only 10 hours will be recognized and eligible for invoicing.
Summary
While all billable time is potentially chargeable to the client, recognized time refers to the portion of billable time that aligns with the budget or service agreements, particularly important for fixed billing type services.