Articles on: Best Practices

The Hidden Cost of Unbillable Labor

Unbillable labor is one of the most overlooked threats to profitability in the landscape industry. It refers to any time your team is on the clock but not actively producing work that can be billed to a client. While some of this time is unavoidable, much of it can be reduced, or even eliminated with the right systems in place.

Common examples of unbillable labor include:

Travel between job sites
Picking up materials or fuel
Loading and unloading equipment
Attending meetings or training sessions
Waiting for instructions or jobsite access

These tasks may seem minor, but they add up fast. For example, if a crew member earning $30/hour spends an hour picking up materials, and you're billing their time at $70/hour, you’ve lost $100 in that single hour, $30 in wages and $70 in missed revenue. Multiply that across your team and your season, and the impact becomes staggering.

The $285,000 Problem: Real-World Example

Let’s say you run three two-man crews, and each worker averages 2 hours of unbillable labor per day. If they work 5 days a week, 11 months a year, the cost of that lost time adds up quickly:

Direct labor cost: $85,734

Opportunity cost (lost billable revenue): $200,046

Total impact: $285,780 per year

That’s nearly $300,000 in combined cost and missed revenue, just from two hours of unproductive time per day.

How Profit Genie Helps You Budget for Unbillable Labor

This is where Profit Genie becomes essential. When you enter your unbillable hours into the system, it automatically adjusts your PMM (Production Minus Materials) rate to ensure you’re still on track to meet your profit goal.

Here’s how it works:

As you increase unbillable hours, your required hourly rate goes up to compensate for the lost production time.
If you want to keep your pricing competitive, you may need to lower your profit goal to offset the added labor cost.
Either way, Profit Genie gives you a clear, data-driven view of how unbillable labor affects your bottom line, so you can make informed decisions instead of guessing.

Or, Just Bill for It

Not all unbillable labor has to stay unbilled. If a project is two hours away, for example, you can add that travel time directly to the Project Overhead section and apply your standard markup. This ensures you're recovering the cost of that labor while still presenting a clean, bundled price to the client. It’s a simple, transparent way to protect your margins without inflating your base rates.

Where Unbillable Labor Hides, and How to Fix It

Morning shop stops: Have crews drive directly to the jobsite instead of meeting at the shop.
Material runs: Pay for delivery whenever possible. The cost of a short-load fee is almost always less than the cost of lost labor and productivity.
Inefficient routing: Use Smart Calendar to reduce drive time and overlap.
Underutilized labor: Track unbillable hours with GPS-stamped time tracking to identify patterns and make data-driven changes.

💡Pro Tip: Our Co-founder offered to either buy his crews company trucks or give them a raise (with distance-based bonuses) and they would drive directly to the jobsite. Every employee chose the raise. Why? Because they preferred the money and less time in traffic. Reducing unbillable labor isn’t just good for your bottom line, it’s good for morale, too.

Unbillable labor is silent, invisible, and expensive, but it’s also fixable. With the right tools and a few smart changes to your daily operations, you can reclaim lost hours, increase profitability, and give your team a more focused, productive workday.

Updated on: 01/07/2026

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