Time billing helps agencies split project revenue between specific people, roles, or teams based on the work they actually delivered.

They are used to identify:

This feature is especially useful when several people, roles, or teams work on the same project, and the agency needs to understand who contributed what share of the project revenue. It also helps distinguish work that was actually invoiced to the client from work delivered beyond the invoiced amount.

In standard project billing, Allfred records how much time was tracked on a project and how much was invoiced to the client. However, the invoice itself does not define which exact time entries were covered by that invoice.

For example:

In this case, the agency needs to decide which part of the work is covered by the invoice and which part remains as overservice. This is what Time billing is used for.

It splits the amount available for distribution across specific time entries. As a result, tracked time is divided into:

Time billing records are usually created after the end of a month, once the agency has prepared or issued invoices for that period and has received all the expected costs. A typical workflow is:

However, you can choose any date range depending on your workflow.

First, choose the date range for which you want to create the time billing record. Allfred preselects the previous month by default because allocations are most often created retrospectively for the previous month. You can adjust the dates accorting to your needs.

The selected date range determines which data is prefilled into the record:

You can still add additional items outside the selected period by clicking on the pencil icon later if needed.

You can name the time billing record so it is easier to identify later.

When creating an allocation, Allfred works with several data sources:

This section shows outgoing invoices issued on the project.

Allfred automatically selects invoices that fall within the selected date range. Other project invoices may also be displayed if they have not yet been used in another time billing.

Important rule:

An invoice that has already been used for another time billing should not be used again in a new record.

Invoices are not displayed only as one total amount. Allfred breaks them down by invoice items, for example into:

This allows the agency to decide what should be included in the profit distribution. Some agencies may want to distribute only revenue from work, while others may also include invoiced expenses.

Based on the selected invoices and costs, Allfred calculates the amount that can be distributed between people. This amount consists of several components.

A work expense can be created in two ways:

The result of all input components is the Time billing to allocate amount.

This is the amount that Allfred will distribute between people, roles, or teams.

In simplified form:

Time billing to allocate = invoiced work + invoiced expenses + prepayments – work expenses – external costs

You can also manually adjust individual components. This is useful, for example, when you expect a cost that has not yet been added to Allfred. You may use the Note field to specify manual adjustments.

Recommendation:

Make manual adjustments only at the end, after all invoices and expenses have been selected.

If you manually adjust a component and then change the selected data sources again, Allfred recalculates the components based on the updated selection. Your manual adjustment may therefore be overwritten.

After the input data is set, the next step is to split the amount between users. In the table displayed under the components, Allfred shows users who tracked time on the project in the selected period. Each row can include information such as:

By clicking the Total tracked hours value, you can open the list of specific time entries included in the table.

Here you can:

After you choose which time entries should be included in the time billing record, you then split the amount between users automatically or manually:

Automatic allocation is useful when the agency wants to split revenue proportionally based on delivered work. With automatic allocation, Allfred distributes the amount according to the value of the work spent. It takes into account:

If the Time billing to allocate amount is lower than the total value of tracked work (Work spent), Allfred distributes the available amount proportionally based on each user's share of the total work spent.

For example, if a user generated 40% of the total work value on the project, they will receive approximately 40% of the Time billing to allocate amount. The allocated amount is then converted into invoiced time based on the user's client rate. Any remaining tracked hours that are not covered by the allocated amount are automatically marked as overservice time.

This means that a single time entry can be partially invoiced and partially overserviced. The more the project is under-invoiced compared to the total value of delivered work, the larger the overservice portion will be across the project team.

Automatic allocation assumes that the available revenue should be distributed proportionally based on the value of work delivered by each person.

However, this approach may not always reflect reality. For example, one user may have generated the highest work value on the project, but a significant portion of their tracked time may have resulted from delays, rework, internal revisions, or other inefficiencies. In such situations, the agency may not want to allocate revenue purely based on the volume of tracked work.

If the proportional distribution does not reflect your internal evaluation of the project, you can switch to Manual allocation and decide yourself how much of the Time billing to allocate amount should be assigned to each user.

With manual allocation, you can adjust how much of the distributed amount should be assigned to a specific person. This can be useful when the agency knows that:

Important rule:

The total of all allocated amounts must equal the Time billing to allocate amount.

If you increase the amount for one user, you need to decrease it elsewhere so that the total remains correct.

Allfred then uses the allocated amount and the client rate to calculate:

Example:

After the total amount is split and equal to "time billing to allocate" value, click on the Create button in the upper right corner. Before that, we recommend naming this time billing record. To rename it, it is necessary to click on the Edit button.

After the allocation is saved, Allfred adds new values to the related time entries.

Invoiced time: Time covered by an invoice.

Overservice time: Time that was worked but not covered by an invoice.

Uninvoiced time: Time that has not yet been included in any allocation.

These values are then visible in the project time report tab as well as in the global time reports. You can filter time entries in the Time report section by Billing status with options Invoiced, Overserviced and Uninvoiced.

Roles such as Admin, CFO or Managing Director can see the user profitability within the project based on their invoiced hours.

Allfred also displays effective hourly rates in allocations. These help you understand the real hourly rate after overservice is taken into account.

Example:

In this case, the work was sold at €100/hour, but the effective rate across all tracked time is €60/hour (calculated as allocated amount divided by number of tracked hours).

The effective rate is important for agencies that monitor whether a person’s work covers internal costs and reaches the required profitability level.

After review, users with roles CFO or Admin can lock the time billing record.

Locking means that time entries included in the record can no longer be edited by regular users in a way that would change the time billing calculation.

A user can only edit the note on a locked time entry. Other fields are locked.

Locking protects the records from later changes after it has been reviewed or approved.

An admin can unlock the time entries if needed.

In a standard time report, Allfred mainly works with tracked time and rates. This means the report can show the value of work based on what was tracked, but it does not necessarily reflect whether that work was actually invoiced.

With allocations enabled, the calculation also includes information about which part of the work was actually covered by invoicing. This makes profitability more accurate because it is based on real allocated invoicing, not only on the theoretical value of tracked time.

When working with time billing, keep these in mind:

Work expenses are a specific type of cost received on work items. They are typically used when work delivered to the client is performed by an external supplier instead of an internal team member.

When creating a work expense, you can enable the Track time option. In this case, Allfred increases the tracked time on the project, effectively simulating that the work was completed by the agency team, even though it was actually delivered by an external supplier.

In many cases, the cost charged by the external supplier is lower than the value invoiced to the client. This creates a profit margin for the agency.

For example:

When distributing the Time billing to allocate amount, the agency can decide how this margin should be handled.

Some agencies prefer to distribute the profit among internal team members because they were responsible for managing or delivering the project. Others prefer to leave the profit assigned to the work expense itself and exclude it from the distribution among internal users.

The important point is that Work expenses are displayed separately from regular project work and reduce the amount available for allocation. The final decision on how to distribute any resulting profit depends on the agency's internal methodology.

Time billing helps agencies identify which work was covered by invoicing and which work remained as overservice.

They allow Allfred to split project revenue between specific people, roles, or teams and provide a more accurate view of profitability.

The basic workflow is:

After saving, time entries are divided into invoiced, overservice, and uninvoiced time. These values are then displayed in reports and help the agency evaluate the performance of people, teams, and projects more accurately.

No. Each outgoing invoice can only be used in one Time billing record. Once an invoice has been allocated, it is not displayed in another Time billing calculation to avoid counting the same revenue multiple times.

Yes. You can manually add time entries outside the selected date range by editing the included records. This is useful when work was tracked in one period but should be allocated in another.

If the Time billing record is not locked, the calculation may no longer accurately reflect the original allocation.

We recommend reviewing the Time billing record whenever included time entries are modified, moved to another task, or reassigned to another budget item.

After a Time billing record is locked, regular users can no longer modify included time entries in a way that would affect the allocation.

Only notes can still be edited. Admin and CFO users can unlock the record if changes are required.

Overservice appears when the value of tracked work is higher than the amount available for time billing allocation.

In other words, more work was delivered than was covered by client invoicing. The uncovered portion is automatically marked as overservice.

Yes. A time entry does not have to be fully invoiced or fully overserviced. Allfred can split the tracked time proportionally, marking part of it as invoiced and the remaining part as overservice.

Overservice is time that was included in a Time billing record but was not covered by the allocated amount.

Uninvoiced time is time that has not yet been included in any Time billing record.

Use Automatic allocation when you want revenue distributed proportionally based on the value of work delivered by each user.

Use Manual allocation when the proportional distribution does not reflect reality, for example:

This is completely normal.

The total Work spent value represents the value of all tracked work based on client rates.

The Time billing to allocate amount represents the actual revenue available for distribution after considering invoices, expenses, prepayments, work expenses, and external costs.

The difference between these two values is what ultimately creates overservice.

Yes. You can manually adjust components such as invoiced work, invoiced expenses, or costs.

However, we recommend making manual changes only after all invoices and expenses have been selected. Otherwise, recalculation may overwrite your manual adjustments.

The total allocated amount must always equal the Time billing to allocate amount.

If you increase the allocation for one user, you must decrease it for another user or row so that the total remains balanced.

A Work expense can include tracked time from an external supplier.

When the Track time option is enabled, the expense is included in the Time billing calculation components, which means it affects the final Time billing to allocate amount. At the same time, the tracked time related to that expense is displayed in the allocation table as a separate row called Work expense.

This allows agencies to decide how any resulting profit margin should be handled. You can either distribute the profit among internal team members by adjusting the allocation manually, or leave it assigned to the Work expense row. If you choose to distribute the profit among your team manually, you can allocate no value to the Work expense row and distribute the amount to users instead.

Click the Tracked time value in the allocation table.

This opens the list of included time entries, where you can review, filter, add, or remove records before creating the Time billing record.

Yes, only if the record is not locked by CFO or Admin. Locked time billing records can be deleted only by these roles. To delete time billing record, click on Bin icon.

Before deleting a Time billing record, make sure you understand how it may affect invoiced, overservice, and uninvoiced statuses in your reports.

The client rate reflects how work is sold to the client.

The effective hourly rate reflects the actual allocated revenue divided by the total tracked time. If a project contains overservice, the effective hourly rate will be lower than the client rate.

For agencies, this metric provides a more realistic view of profitability.