The services-firm metrics glossary
Every number a services firm steers by, defined the way practitioners compute it, with the formula and the traps around it.
Services firms run on a handful of ratios: how much of the team's time is billable, what a day costs versus what it earns, how long people wait between missions. Different firms give the same ratio different names, and some names cover two different formulas. This glossary picks one definition per term, states the formula, and flags where usage diverges.
None of these ratios is defined by a standards body. They are professional practice, converged across the tools and guides firms actually use. Where practice disagrees, we say so instead of pretending to one true formula.
Written for practitioners. If your firm computes a term differently, that is normal, and we say where.
People
Absence rate
The share of theoretical working time lost to unplanned absences, mainly sick leave. In services firms it sits on the activity rate denominator, so the counting convention shapes the number.
Read the definitionActivity and time
Activity rate (excluding leave)
Billed days over working days available after planned leave is removed. The activity rate French consultancies compare month to month.
Read the definitionActivity and time
Activity rate conventions
Two conventions for the activity rate. Both divide billed days by working days, and planned leave in or out of the denominator is the only difference.
Read the definitionActivity and time
Activity rate including leave
Ratio of days worked to potential working days with paid leave kept in the denominator, measuring total capacity use across the full theoretical calendar.
Read the definitionFinancial
Average day rate
The average day rate is the net price of one billed day: revenue invoiced divided by days billed. It is a price, never a cost. Margin lives in the gap to the daily cost of the firm.
Read the definitionActivity and time
Bench time
Bench time is the period when a salaried consultant has no billable mission but is still paid. In staffing firm vocabulary the person is sitting on the bench.
Read the definitionActivity and time
Billable utilization
Billable utilization is the share of hours worked that you invoice to clients: billable hours divided by hours worked, times 100. It measures time, not revenue, and uses a different denominator than the activity rate.
Read the definitionFinancial
Billing forecast
A billing forecast projects future billed revenue from current commitments: each assignment, at its rate, over its remaining days, summed into committed revenue.
Read the definitionPeople
Capacity planning
Capacity planning matches future consultant supply (headcount, skills, availability) against future demand from committed missions and weighted pipeline, so hiring and training decisions come before the gap bites.
Read the definitionFinancial
Consultant day cost
What one consultant day truly costs the firm: gross salary, employer contributions, variable pay, expenses and a share of overhead, divided by billable days.
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