Realization Rate
Realization rate is the share of billable work that is actually invoiced and paid. It compares what you billed against what you could have billed, revealing revenue lost between doing the work and collecting for it.
How it is calculated
Divide the value billed by the value of the billable hours recorded:
- Record 100 billable hours at 100 per hour, and you could bill 10,000.
- If discounts and write-downs mean you invoice 8,500, realization is 8,500 / 10,000 = 85%.
The gap is revenue that was earned but never collected.
Realization vs utilization
Utilization rate asks how much of someone's time was billable. Realization asks how much of that billable value you actually captured. A team can be busy (high utilization) yet still lose money to weak realization, so the two are best read together.
How Sandtime.io fits
Realization starts with an honest record of billable time. Sandtime.io captures billable hours and rates as work happens, so the value you could bill is clear before discounts, and the revenue you actually collect is easier to protect.
Related Terms
Realization rate is read alongside utilization rate, builds on recorded billable hours, and directly affects revenue.