Realization Rate
The share of standard billing value actually collected, after discounts, write-offs, and unbilled time — the gap between the rate card and real revenue.
Realization rate compares what was actually billed and collected against what would have been billed if every hour worked went out at full standard rate with no discounts or write-offs. A realization rate of 85% means 15% of the theoretical full-rate value never made it to revenue — lost to discounting, scope creep, or hours quietly written off.
It's a common blind spot in service-business break-even math: a firm can hit its target billable hours and still fall short of its revenue target if realization is weaker than assumed, since the gap between billed hours and collected dollars doesn't show up until the numbers are checked against each other directly.
Calculate your own realization rate instantly, free.
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