The agency operations glossary.

The percentage of an agency team member’s available hours that are billed to a client — the operating lever behind agency profitability.

A single hourly rate used to bill mixed-seniority work, calculated as the weighted average of the team individual rates.

The forecast of how much billable work the team can realistically deliver in a given period, used to decide what to sell and when to hire.

The profit margin earned on an individual client account, not just the agency average — the number that tells you which clients are worth fighting for.

The average number of days it takes the agency to get paid after invoicing — a direct measure of cash-flow health.

The actual revenue earned per hour of billable work — total fees divided by hours worked — after discounts, overruns, and write-offs.

Revenue minus the direct cost of delivering the work — primarily billable salaries — expressed as a percentage of revenue.

The percentage of billable time that actually gets billed and paid — the leakage between hours worked and hours invoiced.

An ongoing engagement priced on a recurring basis — usually monthly — in exchange for a defined amount of work or capacity.

The gradual expansion of work beyond what the contract priced — extra rounds, new deliverables, "while you are at it" asks — usually unbilled.