Billing Value Calculation
Billing Value — sometimes listed as Labor Billing Value — reflects what a time slip would be worth if billed at its associated billing rate, regardless of the phase's actual billing format. It's calculated as:
Hours × Billing Rate = Billing Value
The Calculation
Billing Value uses the billing rate saved on each time slip, multiplied by the recorded hours. This value is calculated for every time slip whether or not that time slip is actually billable — it's meant to reflect what the time is worth, not just what will ultimately be invoiced.
Rolling Up Billing Value
Billing Value is calculated at the time slip level, then summed upward:
- Time Slip Billing Value = Hours × Billing Rate
- Phase Billing Value = sum of Billing Value from all linked time slips
- Project Billing Value = sum of Phase Billing Value across the project
Why It Matters
Because Billing Value is calculated regardless of billing format, it gives you a consistent way to compare what a phase or project would have billed hourly against what it actually earns under its contracted format. This is particularly useful on Fixed Fee phases: comparing the fixed fee amount to the accumulated Billing Value tells you whether hourly billing would have produced greater income than the fixed fee you agreed to, or vice versa.
Billing Value also feeds into other calculations — for example, it's used to determine Earned Value on Hourly and Hourly Not-to-Exceed phases.
Best Practice
Periodically compare Billing Value to your fixed fees on Fixed Fee phases and projects. If Billing Value consistently runs well above your fixed fees, it may be a signal to revisit how you're pricing that type of work going forward.
Summary
Billing Value is calculated as Hours × Billing Rate for every time slip, whether billable or not, and summed from time slip to phase to project. It provides a consistent benchmark for comparing actual billed income (especially under Fixed Fee contracts) against what the same work would have earned on an hourly basis.