Realization rate

The percentage of an agency's standard billing rate it actually collects, calculated as revenue collected divided by (hours worked × standard rate) — a measure of how much value is being captured versus given away.

Example

At a $150/hour standard rate, a team works 100 hours (worth $15,000 at standard rates) but only bills and collects $12,000, for an 80% realization rate — the other 20% was effectively given away, often to unbilled scope creep.

Why it matters for agencies

Realization rate is one of the cleanest agency-wide metrics for the financial cost of scope creep, because it directly measures the gap between the value of work performed and the value actually captured, across every client and project.