Realistic Targets and KPI’s for your team

Productivity is a ratio, not a feeling

Productivity is billable time divided by total time worked. Work with a billable rate is productive. Work without one is internal. Leave sits outside the calculation entirely, so a team member taking a week off doesn't lower their productivity. Rework is productive work too. It's client work with a billable rate that gets written off, and flagging it as non-billable just hides the cost in the wrong place. All client work is productive work.

Utilisation can lie to you

Utilisation divides billable time by contracted time less leave, multiplied by a target you set. The target is baked into the formula, so a low target makes a struggling firm look healthy. Jenny works 32 billable hours in a week with a day of leave and a 75% target. Her productivity is 76%. Her utilisation is 133%. A firm can show 100% utilisation across the board and still be running at 45% productivity, with everyone busy and no revenue to show for it.

The rule of 55

Across five years of Australian and New Zealand benchmarks (roughly 14 million timesheets a year), industry average productivity has only ever moved between 54% and 56%. That consistency is the point. Aim for 55% or higher at firm level. Hovering around 50% you can still climb to 55%. Drop below 50% and it gets very hard, because you can't afford the next hire, can't create capacity and can't take on new clients. Firms stay stuck there for years.

Every administration hire moves the ceiling

A firm at 58% productivity hires another accountant and gets to 60%. Then the administrator is overwhelmed, so the firm hires marketing and finance help. Now the ceiling is 45% even with every billable team member at capacity, and the firm is running at a loss. Administration isn't only full time admin roles either. Partners spend more time on the business as the firm grows, and every layer of management spends more time with the team and less with clients. Hire the fewest administrators you can get away with.

How to grow from startup to $2 million

Four roles do most of the work: partner, administrator, manager and accountant. Billable team members should sit at 80% productivity or higher. Managers drop 5% for each team member they manage, and four accountants per manager is the limit before review becomes a bottleneck. At five, promote a second manager. Partners lower their target capacity and lift their billable rate as the team grows, because their time becomes scarcer. In a small firm that means partners in the 60s, around 50% at eight to ten people, and 30% or less past 20, where client time becomes a choice. Capacity looks forward and productivity looks backwards. They're the same number.

Recovered rate cuts through the noise

Productivity alone rewards putting time on jobs, even time that gets written off. Recoverability measures how much of that effort turns into invoices, and totals hide the story. Ted's $2,900 net write-off looked modest until the drill down showed a run of write-ups sitting on top of one very large write-off. Recovered rate combines both measures. Revenue is billable time plus net write-ups, which always reconciles back to what was invoiced, even when deposits are invoiced in advance and the work hasn't happened yet.

Firms don't get stuck because their team isn't busy. They get stuck because the structure caps what busy can ever be worth.