Agency operations glossary

The share of a person's available working time that is spent on billable client work.

Billable utilization = billable hours / available hours. The subtlety is in the denominator: some firms divide by total hours worked and some by available hours (total minus holiday, sick leave, and internal commitments), and the two produce very different numbers from the same timesheet. Agree which one you mean before comparing to any benchmark.

It is a diagnostic, not a target to maximize. Sustained very high utilization means no slack to absorb a scope change and no time for the internal work that keeps an agency competitive.

The hours a person can actually give to client work, after subtracting everything else real.

Available hours are what remains of a working week once internal meetings, admin, recruitment, tooling, training, holiday, and sick leave are removed. For most agency roles the honest figure is well below 40 - commonly 25 to 32 - and it varies by seniority, because management responsibility consumes hours that never appear on a client project.

Deriving it empirically from tracked time, rather than assuming a number, is the single change that makes a capacity plan work.

Matching the work you have committed to against the hours your team actually has, over a rolling four-to-eight-week window.

Capacity planning answers one recurring question: given what we have already promised, what can we take on? It compares committed hours to available hours, by role, week by week.

It is distinct from project scheduling. A schedule says when a project's phases happen; a capacity plan says whether the team can absorb those phases alongside everything else in flight. An agency can have a perfect schedule for every project and still be blindsided when three of them collide.

The gradual expansion of a project beyond what was agreed, usually through small requests that are individually reasonable.

Scope creep is rarely one big change. It is a sequence of small ones - a extra revision round, one more page, a slightly different format - each too minor to justify a difficult conversation, and collectively large enough to erase the margin on the project.

The structural defence is a written scope with explicit exclusions and a change-control process, so that "one more thing" produces a visible decision rather than a quiet extra evening.

The document defining what will be delivered, by when, for how much - and explicitly what is not included.

A SOW sits between the contract (which governs the legal relationship) and the brief (which explains the thinking). It is the operational agreement: deliverables, milestones, timeline, assumptions, dependencies, acceptance criteria, and price.

The most valuable section is the one most often left out - exclusions. A scope that lists what is included leaves everything unlisted ambiguous; a scope that also lists what is excluded makes the boundary enforceable without a confrontation.

A written amendment that adds scope, cost, or time to an agreed project.

A change order records that something outside the original scope was requested, what it costs, and how it moves the timeline - and is approved before the work starts.

Agencies often resist raising them, fearing the relationship cost. In practice the opposite is true: a client who is surprised by an invoice is far more damaged than one who approved a number in advance. The change order is what converts scope creep from a margin problem into a revenue line.

The document capturing why a project exists, who it is for, and what success looks like.

A brief covers background, problem, objectives, audience, scope, deliverables, timeline, and budget. It is the shared understanding both sides refer back to when a decision is contested.

A brief is not a SOW. The brief explains the reasoning; the SOW commits to the deliverables. A project with a good brief and no SOW is one that everyone understands and nobody is contractually bound by.

The structured process of gathering what you need from a prospect to qualify them and scope the work.

Intake covers everything between "we might work together" and "here is a proposal": the problem, the budget range, the timeline, the decision-makers, and the constraints.

Done as a form, it is fast but shallow - a form asks all thirty questions regardless of the answers. Done as a discovery call, it is thorough but expensive and unrepeatable. Conversational intake is the attempt to get the adaptiveness of a call at the cost of a form.

The initial conversation used to understand a prospect's problem before proposing work.

A discovery call typically runs 30 to 60 minutes, plus scheduling friction and the write-up afterwards. Its strength is that a human can follow the interesting thread; its weakness is that it does not scale, is hard to run consistently across a team, and produces notes rather than structured data.

The cost is usually underestimated because the write-up is invisible - the call is on the calendar, the hour spent turning notes into a brief is not.

A dedicated, permissioned space where a client can see their own project status, files, and approvals.

A portal answers "where are we?" without anyone writing an email. It typically shows current phase, upcoming milestones, deliverables awaiting review, shared files, and the approval history.

The distinction that matters is between a real portal and a shared view of your internal workspace. A client invited into your project board sees your internal conversation; a portal shows a curated view built for them. The second is a product decision, not a permissions setting.

Software presented under your agency's branding rather than the vendor's.

In an agency context this usually means the client portal: your logo, your colours, and ideally your domain, so the client experiences it as part of your service rather than as a third-party tool you resell.

The depth varies enormously between vendors - from changing a logo to full custom-domain hosting - so it is worth checking exactly which of those a "white-label" claim means.

A recurring fee for an agreed volume of work or access over a period, usually monthly.

Retainers come in two shapes that behave very differently. A capacity retainer buys an agreed number of hours per month; an outcome retainer buys responsibility for an ongoing result regardless of hours.

The common failure is the unmanaged capacity retainer: hours are not tracked against the agreed volume, overage accumulates silently, and by the time anyone reconciles it there is no defensible conversation left to have.

Work that has been delivered or partly delivered but not yet invoiced.

WIP is the gap between doing the work and billing for it. It matters because it is real value the agency is carrying but has not converted into cash, and because unbilled work has a habit of becoming unbillable work as memories fade and relationships change.

A large or ageing WIP balance is one of the earliest signals of a cash-flow problem, and it usually precedes the problem by a month or two.

The share of tracked billable time that actually gets invoiced.

Realization rate = invoiced hours / billable hours tracked. A rate below 100% means work was done, logged as billable, and then written off - through discounting, unbilled overage, or scope absorbed without a change order.

It is the metric that separates "we are busy" from "we are paid". High utilization with low realization is one of the most dangerous combinations in an agency, because the team is at capacity and the revenue does not reflect it.

Assigning specific people to specific work across a period.

Allocation is the decision layer that sits on top of capacity planning: capacity tells you the work fits, allocation decides who does it.

The error that makes allocation plans wrong is treating people as interchangeable hours. Six people with thirty available hours each is not one hundred and eighty fungible hours - the senior strategist cannot absorb overflow front-end work, so allocation has to be done by role and, where the skill is scarce, by name.

Professional Services Automation - software combining project delivery with the financial side of running a services business.

PSA tools bring project management together with time tracking, resource planning, budgeting, profitability reporting, and billing. The defining characteristic is that delivery and finance read from the same data, so utilization and project margin are computed rather than assembled.

The trade-off is weight. A full PSA is aimed at firms whose bottleneck is resourcing and profitability across a large client base; below roughly fifteen people it is often more machinery than the problem requires.

A single hourly rate charged across a mixed team, instead of a different rate per role.

A blended rate averages the cost of a team - senior and junior, strategy and production - into one number quoted to the client. It simplifies estimating and invoicing, and it removes the awkward conversation about which person did which hour.

It is only safe if the actual mix of seniority matches the mix the rate assumed. A project that ends up staffed more senior than planned loses money silently, because nothing in the invoice reveals the shift.

The formal start of delivery, where the team and client align on scope, roles, and cadence.

A kickoff establishes who does what, how decisions get made, who has approval authority, and how often you will communicate. It is the last comfortable moment to surface a mismatch in expectations.

The most valuable output is not the plan - it is agreement on the approval path, because almost every late project can trace part of its delay to waiting on a decision from someone who was never named.

The process of taking a signed client from contract to productive working relationship.

Onboarding covers the handoff from sales to delivery, access and tooling setup, introductions, kickoff, and the early check-ins that catch mismatched expectations while they are still cheap to fix.

It is disproportionately important because the first few weeks set the client's expectation of what working with you is like. An agency that delivers excellent work after a chaotic onboarding spends the rest of the engagement recovering ground it did not need to lose.

The pace at which a project consumes its budgeted hours or fees.

Project burn rate compares hours consumed to hours budgeted at a point in time. A project 60% through its budget and 30% through its scope is in trouble, and the burn rate is what makes that visible while there is still time to act.

It is only useful if time is tracked close to when the work happens. Timesheets reconstructed on Friday produce a burn rate that is accurate in total and useless for intervention.