Accurate billable hour tracking is one of the highest-leverage habits a freelancer can build. It protects you from scope creep, makes invoicing fast and defensible, and gives you the data to price future projects accurately. Yet most freelancers do it inconsistently, or not at all. Here is a step-by-step system that works.
Step 1: Define What Is Billable
Before tracking, you need clarity on what counts. The default assumption is that only direct project work is billable: writing, design, code, strategy. But many freelancers undercharge by not billing for adjacent work that a full-time employee's salary would cover.
Review calls and meetings: are these billable? For most project-based engagements, yes. Your time in a client call is time you are working for that client. Revisions: are these billable? This depends on your contract. Revisions within scope should be billable; revisions from scope changes are definitely billable.
Define your billable categories clearly in your contract and client onboarding. This prevents disputes later and lets you track confidently knowing what to log.
Step 2: Set Up a Project-Based Structure
Create a project for each client (or each engagement, if you work on multiple projects per client). All tasks and time entries for that client go inside that project.
This structure makes reporting instant. Your time tracker can filter by project to show total hours for Client A this month. Without this structure, you spend billing day manually sorting through a flat list of time entries trying to remember which ones belong to which client.
Step 3: Start the Timer Before You Start Work
The most important habit in billable hour tracking: start the timer first. Not after the first paragraph is written or the first line of code is committed. Before.
The reason is psychological. If you start working and then remember to start the timer 20 minutes later, you have to decide whether to log those 20 minutes. Most freelancers underlog this way. They leave out the minutes they cannot precisely account for, consistently shortchanging themselves over hundreds of work sessions.
Use your task manager as the trigger. Open the task, click start timer. This makes it a single action rather than a separate habit to remember.
Step 4: Stop the Timer When You Stop Working
The inverse of the previous step: stop the timer when you stop working on the task. Not when you think you are done, but when you switch to something else or take a break.
Common failure mode: leaving the timer running while you check Slack, eat lunch, or do admin. When you realize it 90 minutes later, you face an unpleasant choice: log 90 minutes honestly (inaccurate) or adjust (requires memory and feels dishonest). Avoid this by making stopping the timer as automatic as starting it.
Step 5: Separate Billable from Non-Billable
Track non-billable time too: admin, proposals, accounting, marketing. Not to bill clients for it, but to understand your real effective rate.
Example: you bill $5,000 in a month from 50 tracked billable hours. Your stated rate is $100/hour. But if you also worked 20 hours of non-billable time that month, your effective rate is $5,000 / 70 hours = $71/hour. This gap is the data you need to raise rates, reduce non-billable overhead, or adjust project pricing.
Step 6: Invoice from Your Time Data
At invoice time, pull a time report for the client project covering the billing period. If your time tracker integrates with invoicing, this can be a single click. If not, export the report and use the total hours as the basis for the invoice.
Include a time breakdown in the invoice or as an attachment: task-level time logs for the period. Clients who can see exactly what was worked on raise fewer questions about amounts. It also creates a paper trail if a dispute arises.
Frequently Asked Questions
What is the best way to track billable hours for multiple clients?
Use a tool with project-based tracking. Create one project per client, log all tasks and time inside that project. At billing time, filter by project to get the total hours for each client. This eliminates manual sorting and gives you per-client summaries instantly.
Should I round billable hours up or track exactly?
Track exactly. Rounding up erodes client trust and creates inconsistency. Rounding down consistently leaves money on the table. Use your actual time logs. If you are consistently uncomfortable with exact times, it is often a sign that your rates need adjustment, not that your logs do.
How do I handle time I forgot to track?
Reconstruct it as best you can from context: calendar entries, email timestamps, git commits, file modification dates. Log the reconstructed time with a note that it was manually estimated. Accept that you will not recover it perfectly and use it as motivation to be more consistent going forward.
Do I need separate invoicing software or can my time tracker handle it?
Depends on your volume. For fewer than 5 clients, many time trackers include basic invoicing or export to PDF. Harvest and FreshBooks combine time tracking and invoicing well. For simpler needs, tracking time in Flowly or Toggl and invoicing through Wave (free) is a clean two-tool setup.
This article was originally published on flowly.run/blog/track-billable-hours-freelancer. Flowly is one workspace for tasks, timers, and analytics, built for freelancers who are tired of running four separate apps to answer one question: where did my week go.
