> ## Documentation Index
> Fetch the complete documentation index at: https://docs.charle.agency/llms.txt
> Use this file to discover all available pages before exploring further.
# Billing Examples
> Worked examples showing how billing calculations work in practice
These examples show how the billing formula applies in real scenarios. Each example walks through the calculation step by step.
## Quick Reference
The billing formula for each requirement:
```
Billable = MIN(maximum, MAX(average, actual))
```
| Scenario | Actual vs Estimate | Result |
| ----------------- | ---------------------- | ------------------ |
| Fast completion | Actual \< Average | Bill the average |
| Normal completion | Average ≤ Actual ≤ Max | Bill the actual |
| Overrun | Actual > Max | Bill the max (cap) |
***
## Example 1: Fast Completion (Banked Time)
A developer finishes efficiently, beating the quoted average.
**Task:** Update checkout flow
**Requirement:** Development, sized **M** (3-6 hours)
| Metric | Value |
| ------------- | --------- |
| Average | 4.5 hours |
| Maximum | 6 hours |
| Actual logged | 3 hours |
**Calculation:**
```
Billable = MIN(6, MAX(4.5, 3))
= MIN(6, 4.5)
= 4.5 hours
```
**Result:**
* Client pays: 4.5 hours (the quoted average)
* Team worked: 3 hours
* Banked time: 1.5 hours (profit margin)
Banked time rewards efficiency. The team completed quality work in less time, creating margin for the agency.
***
## Example 2: Normal Completion
Work takes longer than average but stays within the quoted range.
**Task:** Build product filters
**Requirement:** Development, sized **L** (8-16 hours)
| Metric | Value |
| ------------- | -------- |
| Average | 12 hours |
| Maximum | 16 hours |
| Actual logged | 14 hours |
**Calculation:**
```
Billable = MIN(16, MAX(12, 14))
= MIN(16, 14)
= 14 hours
```
**Result:**
* Client pays: 14 hours (actual time)
* Team worked: 14 hours
* No banked time or overage
This is the expected outcome when estimates are accurate but the work is on the complex side of the range.
***
## Example 3: Overrun (Capped)
Work exceeds the maximum, but the client is protected by the cap.
**Task:** Integrate payment gateway
**Requirement:** Development, sized **L** (8-16 hours)
| Metric | Value |
| ------------- | -------- |
| Average | 12 hours |
| Maximum | 16 hours |
| Actual logged | 22 hours |
**Calculation:**
```
Billable = MIN(16, MAX(12, 22))
= MIN(16, 22)
= 16 hours
```
**Result:**
* Client pays: 16 hours (the maximum cap)
* Team worked: 22 hours
* Overage: 6 hours (absorbed by agency, non-billable)
Overage is a red flag. Review why this happened—was the scope larger than expected? Was there technical debt? Should the estimate have been XL?
***
## Example 4: Multi-Requirement Task
A task with both design and development, each calculated separately.
**Task:** Redesign account settings page
### Design Requirement (sized M)
| Metric | Value |
| ------------- | --------- |
| Average | 4.5 hours |
| Maximum | 6 hours |
| Actual logged | 3.5 hours |
```
Billable = MIN(6, MAX(4.5, 3.5)) = 4.5 hours
Banked: 1 hour
```
### Development Requirement (sized L)
| Metric | Value |
| ------------- | -------- |
| Average | 12 hours |
| Maximum | 16 hours |
| Actual logged | 15 hours |
```
Billable = MIN(16, MAX(12, 15)) = 15 hours
Banked: 0, Overage: 0
```
### Task Totals
| Metric | Design | Development | Total |
| ------------ | ------ | ----------- | ----- |
| Quoted (avg) | 4.5h | 12h | 16.5h |
| Actual | 3.5h | 15h | 18.5h |
| Billable | 4.5h | 15h | 19.5h |
| Banked | 1h | 0 | 1h |
| Overage | 0 | 0 | 0 |
**Result:** Despite development taking longer, the design efficiency created 1 hour of banked time overall.
***
## Example 5: Tiny Task (XS)
Small tasks use the same formula, just with smaller numbers.
**Task:** Fix typo on contact page
**Requirement:** Development, sized **XS** (0-30 mins)
| Metric | Value |
| ------------- | ------- |
| Average | 15 mins |
| Maximum | 30 mins |
| Actual logged | 10 mins |
**Calculation:**
```
Billable = MIN(30, MAX(15, 10))
= MIN(30, 15)
= 15 mins
```
**Result:**
* Client pays: 15 mins
* Team worked: 10 mins
* Banked: 5 mins
Even tiny efficiency gains add up across many small tasks.
***
## Example 6: Large Task (XXL)
Large tasks follow the same rules but with bigger stakes.
**Task:** Build customer portal MVP
**Requirement:** Development, sized **XXL** (40-120 hours)
| Metric | Value |
| ------------- | --------- |
| Average | 80 hours |
| Maximum | 120 hours |
| Actual logged | 95 hours |
**Calculation:**
```
Billable = MIN(120, MAX(80, 95))
= MIN(120, 95)
= 95 hours
```
**Result:**
* Client pays: 95 hours (actual)
* Within the quoted range
* No banked time or overage
***
## Common Patterns
### Pattern: Consistent Small Gains
When the team regularly finishes 10-20% under average:
| Task | Avg | Actual | Billable | Banked |
| --------- | ------- | --------- | -------- | -------- |
| Task A | 8h | 7h | 8h | 1h |
| Task B | 4h | 3.5h | 4h | 0.5h |
| Task C | 12h | 10h | 12h | 2h |
| Task D | 6h | 5h | 6h | 1h |
| **Total** | **30h** | **25.5h** | **30h** | **4.5h** |
**Interpretation:**
* Team is efficient
* Estimates may be slightly conservative
* Good profit margins
### Pattern: Occasional Overruns
Mixed results with some tasks going over:
| Task | Avg | Max | Actual | Billable | Result |
| --------- | ------- | ------- | ------- | -------- | ----------- |
| Task A | 8h | 12h | 6h | 8h | +2h banked |
| Task B | 4h | 6h | 4h | 4h | neutral |
| Task C | 12h | 16h | 18h | 16h | −2h overage |
| Task D | 6h | 8h | 5h | 6h | +1h banked |
| **Total** | **30h** | **42h** | **33h** | **34h** | **+1h net** |
**Interpretation:**
* Mostly healthy
* Task C needs investigation—why the overrun?
* Net positive despite one problem task
### Pattern: Systemic Underestimation
When overruns are frequent:
| Task | Avg | Max | Actual | Billable | Overage |
| --------- | ------- | ------- | ------- | -------- | ------- |
| Task A | 8h | 12h | 14h | 12h | 2h |
| Task B | 4h | 6h | 8h | 6h | 2h |
| Task C | 12h | 16h | 20h | 16h | 4h |
| **Total** | **24h** | **34h** | **42h** | **34h** | **8h** |
**Interpretation:**
* Serious estimation problem
* 8 hours of non-billable work
* Need to review estimation process
* Consider bumping future tasks up a size
***
## Month-End Rollover Example
Showing how billable hours affect next month's allocation.
**Client:** TechStart Inc
**Monthly allocation:** 60 hours
### Month 1 Tasks
| Task | Avg | Billable |
| ----------------- | ------- | -------- |
| Homepage redesign | 16h | 18h |
| Blog integration | 12h | 14h |
| Contact form | 8h | 8h |
| Mobile fixes | 10h | 12h |
| Performance audit | 8h | 10h |
| **Total** | **54h** | **62h** |
**Rollover calculation:**
* Allocated: 60 hours
* Billable: 62 hours
* Rollover: 2 hours
### Month 2
* Base allocation: 60 hours
* Minus rollover: 2 hours
* **Available: 58 hours**
PM plans Month 2 work to fit within 58 hours.
***
## Related
The formula explained
Size definitions and ranges
How hours carry between months
Understanding banked time and overage