Methodology & Disclaimer

This page explains exactly how your estimate was built: what you told us, what we assumed, what we borrowed from published research, and what we calculated. Nothing here is hidden inside a single dramatic number.

How to read this page

Every figure in the calculator falls into one of four categories:

• User-provided input — something you told us directly.
• Industry benchmark — a range drawn from published professional-services research.
• Internal modeling assumption — a conservative default we chose because the real number isn't knowable from a two-minute questionnaire. This is not an industry standard; it's our judgment call, disclosed so you can challenge it.
• Calculated estimate — arithmetic performed on the above.

What we asked, and what we did with each answer

1. Client-facing team size User input

If you gave an exact number, we used it directly. If you chose a range, we used its midpoint:

2. Annual client-services revenue User input

3. Average billing rate User input

Billing rate is a single representative value, not a range — the low/high spread in your results comes from the other variables, not from uncertainty about rate.

4. Weekly administrative time per employee User input / Benchmark

The "not tracked" range is deliberately wide — deliberately, because we genuinely don't know, and a narrow range would overstate our confidence, not yours.

5. Unbilled work and write-offs User input / Benchmark

Published research on professional-services revenue leakage cites figures as high as roughly 5–12%, but we treat that figure as medium confidence pending independent verification of the underlying sources, so this calculator deliberately uses a lower, more conservative range until that verification is complete.

6. Billing delay User input / Benchmark

This question measures invoice-preparation delay specifically: the time between finishing work and sending an invoice for it. It is not the same thing as full accounts-receivable lockup, which separately published research places at roughly 60–93 days for professional-services firms. Lockup includes both unbilled work and unpaid invoices sitting after they've been sent — a distinct, later-stage problem from the one this question measures. We keep the two separate on purpose.

7. Scope and pricing visibility User input

This answer (Rarely / Sometimes / Often / Very often / Not currently tracked) feeds your Visibility Risk Score and recommended actions — it is not converted into a dollar figure. Scope creep that isn't priced is already captured, indirectly, in your unbilled-work percentage; counting it twice would inflate your number without a second underlying cause. Commonly cited project-management research (PMI) puts scope creep at roughly 52% of projects, though that figure is from an older study and should be independently dated before being republished as current.

How the results are calculated Calculated

A. Annual administrative hours

= Client-facing team size × administrative hours/week × 48 working weeks

We use 48 rather than 52 weeks to conservatively account for holidays and leave.

B. Gross capacity value

= Annual administrative hours × billing rate

Labeled in your results as "potential billable capacity consumed by administration." This is not guaranteed revenue — it's the value of time that could theoretically have been billed, not time that would automatically have been sold.

C. Recoverable capacity value

= Gross capacity value × 15–30% recoverability factor Assumption

Not every administrative hour can realistically be reclaimed and turned into billable work. 15–30% is our internal modeling assumption, not a published industry benchmark, and we say so plainly.

D. Revenue leakage exposure

= Annual services revenue × selected unbilled/write-off percentage

Example: $5,000,000 × 1–3% = $50,000–$150,000 exposed annually.

E. Recoverable leakage value

= Revenue leakage exposure × 10–25% recovery factor Assumption

We do not claim any product or process eliminates all leakage. 10–25% is a conservative recovery range pending real pilot data — again, our assumption, not a guarantee.

F. Estimated annual opportunity

= Recoverable capacity value + Recoverable leakage value

Shown as a low/high range. Delayed cash (below) is deliberately excluded from this figure — it is a separate problem with a separate cause.

G. Revenue awaiting invoicing

= (Annual services revenue ÷ 365) × billing-delay days

Example: $5,000,000 ÷ 365 × 30 days ≈ $411,000. We call this "revenue awaiting invoicing," never "lost revenue" — it is a working-capital timing problem, not a permanent loss. Conflating the two is a common but misleading shortcut, and we avoid it here.

Visibility Risk Score Calculated

Each metric you told us your firm doesn't currently track adds points, to a maximum of 100:

Confidence in your estimate is a separate, related label:

Payback estimate

Estimated payback in months = Annual subscription price ÷ conservative (low-end) estimated annual opportunity × 12

This estimate assumes sufficient client demand exists to convert recovered capacity into billable work. Recovering an hour of capacity does not, by itself, create a client willing to pay for it — that assumption is disclosed, not hidden.

Why we separate these three things

Capacity potentially lost, cash delayed by slow billing, and risk created by metrics you don't track are three different problems with three different fixes. Adding them into one large number would overstate your exposure and blur which lever actually moves it — that's marketing math, not planning math. We show you three ranges instead of one headline figure so the number you act on is the number that's actually true.

Data use

Your answers are used to generate your estimate and, with your consent when you request the full report, to prepare for a Client Work Leakage Review. Aggregated, anonymized responses may be used to develop segment-specific benchmarks once a large enough and methodologically consistent sample has been collected. No individual firm's data is published or shared without permission.