Guide
Glossary
Recoverability
Recoverability is the share of the value of recorded time that a firm actually bills, shown as a percentage. Time is valued at standard charge-out rates, so if staff record $10,000 of time on a job and the client is invoiced $8,500, recoverability is 85%. Write-offs, discounts and fixed fees that run over budget pull it down; write-ons on efficient fixed-fee work can push it above 100%. Some firms measure against cash collected rather than fees billed, and law firms often call the measure realisation. Because definitions vary, a firm should agree which one it uses before comparing teams or years.
Also called Recovery rate, Realisation
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Example
In an accounting firm
For example, an accounting firm sees that recoverability on its fixed-fee annual compliance jobs has slipped from about 95% to 80% over two years. Reviewing the jobs by client shows that fees were never raised as those clients' affairs grew more complex, so the partners reprice the worst-affected clients before the next engagement letters go out.
Guides that explain it in context
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