Available Hours
The hours an employee could work in a period, normally scheduled working hours minus public holidays and approved leave.
Available hours = scheduled hours - holidays - approved leave
Glossary
Professional services glossary: PSA, utilization, realization and 33 more terms
36 terms every services firm uses to run projects, price work and protect margin, each defined in a sentence or two, with the standard formula where one exists.CrmLeaf notes flag paid add-ons.
36 terms
A
B
Billable Hours
Hours worked that a firm can charge to a client under its contract, as opposed to internal or administrative time.
In CrmLeaf: Billable time pulls into invoices. Time Tracking
Billable Utilization
The share of available hours spent on billable work.
Billable utilization % = billable hours / available hours x 100
Budget at Completion (BAC)
The total planned budget for a project.
Burn Rate
The pace at which a project consumes its budget or hours over time, compared with progress to see if it will finish within budget.
Burn rate = cost (or hours) consumed / time elapsed. Budget burn % = actual cost / budget x 100
In CrmLeaf: Budget Management add-on has burn-down views. Budget Tracking
C
Capacity Planning
The process of comparing the work a firm expects (demand) with the hours its people can deliver (capacity), then adjusting hiring, scheduling or scope to close the gap.
Capacity (hours) = people x available hours per person. Gap = capacity - planned demand
In CrmLeaf: Resource Utilization add-on has a Capacity view. Resource Management
Change Order
A written agreement that changes the agreed scope, price or schedule of a project.
Cost Performance Index (CPI)
An earned value measure of cost efficiency.
CPI = EV / AC
In CrmLeaf: Budget Management add-on reports CPI. Budget Tracking
Cost Variance (CV)
The difference between the value of work completed and what it actually cost.
CV = EV - AC
E
Earned Value (EV)
The budgeted value of the work actually completed to date.
EV = % complete x BAC
Earned Value Management (EVM)
A project control method that combines scope, schedule and cost into one set of measures: planned value, earned value and actual cost. It produces indicators such as CPI, SPI and forecasts of final cost.
CV = EV - AC; SV = EV - PV; CPI = EV / AC; SPI = EV / PV
In CrmLeaf: Budget Management (add-on) calculates EV, PV, CV, SV, CPI, SPI, EAC, ETC and VAC. Budget Tracking
Estimate at Completion (EAC)
A forecast of the total cost of a project when it finishes.
EAC = BAC / CPI (one common method). ETC = EAC - AC
F
Fixed Fee
A pricing model where the client pays an agreed total price for a defined scope, regardless of hours spent.
G
Gross Margin
The share of revenue left after direct delivery costs such as staff time and subcontractors.
Gross margin % = (revenue - direct costs) / revenue x 100
M
Milestone Billing
Invoicing when agreed project milestones are completed rather than by hours worked or on a calendar.
In CrmLeaf: Milestones can be invoiced directly. PSA software
N
Non-Billable Hours
Hours that are not charged to a client, such as internal meetings, training, administration, business development or unpaid rework.
P
Planned Value (PV)
The budgeted cost of the work scheduled to be completed by a given date.
Professional Services Automation (PSA)
Software that runs the core operations of a services firm in one system: projects, time and expense tracking, resource scheduling and billing, with margin reporting. See the full guide: what is PSA software.
In CrmLeaf: CrmLeaf is a PSA platform covering quote to cash. PSA software
Project Profitability
How much profit a project earns after its direct costs, usually shown as a margin percentage.
Project profit = revenue - (labor cost + expenses). Margin % = profit / revenue x 100
In CrmLeaf: Budget Management (add-on) tracks budget vs actual. Budget Tracking
PSA Software (what is PSA software)
PSA stands for professional services automation. PSA software is a business system that connects project delivery, time tracking, resource planning and invoicing so a services firm can see utilization and project profit in one place.
In CrmLeaf: See PSA software
R
Rate Card
A list of standard billing rates (the price per hour) by role, person or service.
Realization Rate
The percentage of the standard value of time worked that is actually billed. A rate below 100 percent means time was written down or written off before invoicing.
Realization % = billed value / standard value of time worked x 100
Resource Allocation
Assigning people to projects or tasks for specific hours or dates.
Resource Management
The practice of finding, scheduling and balancing people across projects so skills, availability and workload match demand.
In CrmLeaf: Resource management is covered at Resource Management
Resource Utilization
How much of a person's or team's available capacity is used on work. It can be measured as billable utilization or total utilization, so state which hours are in the numerator.
Utilization rate % = hours worked on the chosen work type / available hours x 100
In CrmLeaf: The Resource Utilization add-on and the free Team Utilization Calculator help. How-to: calculate resource utilization rate.
Retainer
An arrangement where a client pays a recurring fee, often monthly, to secure ongoing access to a firm's services or a set block of hours. Unused hours may or may not roll over, depending on the contract.
In CrmLeaf: Recurring invoices can bill retainers. PSA software
S
Schedule Performance Index (SPI)
An earned value measure of schedule efficiency.
SPI = EV / PV
Schedule Variance (SV)
The difference between work completed and work planned by a given date, in value terms.
SV = EV - PV
Scope Creep
The gradual expansion of project work beyond the agreed scope without matching changes to price, budget or schedule. It erodes margin, especially on fixed-fee work, and is controlled with change orders.
Statement of Work (SOW)
A document defining the work, deliverables, timeline, responsibilities and pricing for an engagement.
T
Time and Billing
The process of capturing time and expenses against projects and clients, approving them, and turning them into invoices.
In CrmLeaf: Timelogs, timesheets and invoices are linked. Time Tracking
Timesheet
A record of hours worked, usually by day and by project or task, submitted for approval.
In CrmLeaf: Weekly timesheets support submit and approve. Time Tracking
T&M vs Fixed Fee
Time and materials (T&M) bills hours and expenses at agreed rates, so the client carries the effort risk. Fixed fee charges an agreed price for a defined scope, so the firm carries it. T&M suits uncertain scope; fixed fee suits well-defined scope.
T&M revenue = hours x rate + expenses. Fixed fee revenue = agreed price
U
Utilization Rate
The percentage of available hours that are spent on a defined type of work, most often billable work. Always state the denominator, because firms use scheduled hours, 40-hour weeks or hours after leave.
Utilization rate % = billable hours / available hours x 100
W
Work in Progress (WIP)
Work performed on projects but not yet invoiced, valued at cost or at billing value. A growing WIP balance can point to delayed invoicing or milestones that are not being billed.
WIP = value of time and expenses recorded - amounts invoiced to date
Write-Off
Removing recorded time or expense from billing entirely, so the firm absorbs the cost.
Related reading
Go deeper
What is PSA software?Read the guidePSA vs ERPRead the guidePSA vs project managementRead the guidePSA vs CRMRead the guideCalculate utilization rateRead the guidePSA softwareRead the guideFree toolsRead the guideTime trackingRead the guideResource managementRead the guideBudget trackingRead the guide
FAQ
Common questions
PSA software (professional services automation) is a business system that connects projects, time and expense tracking, resource scheduling, invoicing and profitability reporting for firms that sell time and expertise.
See utilization and margin in one place
Track time, plan capacity and invoice in one platform.