Delivery hours refer to the total number of hours that agency team members spend working directly on client deliverables. These are the hours that contribute to the creation and execution of services promised in a contract—such as strategy development, design, development, copywriting, account management, and execution.
Unlike administrative or internal time (which is not focused on delivering client work), delivery hours represent the active time spent fulfilling the scope of work. They may include both billable and non-billable time, depending on how the agency tracks and classifies labor, but are always tied to the completion of client-facing work.
Delivery hours are often used as a key input for calculating project performance, team utilization, and average billable rates.
Why it matters for agencies
Delivery hours are the core of service-based work in agencies. They represent the actual effort required to execute work and fulfill contracts. Monitoring delivery hours helps agencies measure efficiency, resourcing needs, and profitability.
Here’s why delivery hours matter:
- Reveals true effort: Tracks how much time is needed to complete a project, regardless of how it affects billing.
- Informs resource planning: Identifies team bandwidth and future capacity.
- Supports ABR calculations: Acts as the denominator when accurately calculating revenue-earning efficiency metrics like Average Billable Rate (ABR)
- Highlights overservicing: Shows where time is being spent beyond scope, including time that isn’t being billed/paid for/
- Drives utilization metrics: Provides the numerator for accurately measuring how Utilized teams are with client work.
How to optimize
To get the most value from tracking delivery hours, agencies need consistent processes and disciplined time tracking practices.
Here are a few best practices:
- Track time early and often: Encourage staff to record all time spent on clients, even if they don’t consider it “billable”. Encourage frequent (ideally daily) timesheet cadences.
- Differentiate between billable and non-billable delivery hours: Understand where time is being spent but not billed.
- Leverage existing data: Consider using resource plans, calendar integrations and device monitoring tools to help your team keep track of where time is going, and keep timesheets accurate and up-to date.
- Review delivery hours vs. estimates: Identify gaps between planned and actual effort.
- Use delivery data for scoping: Improve future pricing and planning based on historical delivery hour performance.
- Monitor team performance and burnout: Use delivery data to identify overload risks or inefficiencies.
By measuring and optimizing delivery hours, agencies can gain a clearer picture of their operational performance and make data-driven decisions about pricing, staffing, and client management.