Plain-language definitions backed by examples, not jargon.
ClockoutGlossary
Freelance billing glossary — every term you need, defined plainly
Clear definitions for the billing, invoicing, and time tracking terms freelancers and consultants encounter every week. Each entry includes examples and how it connects to real workflow.
Covers billable hours, utilization, payment terms, invoicing, and cash flow.
Each term links to related concepts and the Clockout workflow that addresses it.
All terms
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Each definition page answers the 'what is' question directly, shows a worked example, and links to the Clockout feature or calculator that applies.
Definition
Billable Hours
Billable hours are the hours a service provider spends on work that can be charged to a client, as opposed to non-billable administrative or internal time.
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Definition
Utilization Rate
Utilization rate is the percentage of total work hours that are billable. It measures how much of your work week generates revenue versus administrative overhead.
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Net 30
Net 30 is a payment term meaning the full invoice amount is due within 30 days of the invoice date.
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Definition
Net 15
Net 15 is a payment term meaning the full invoice amount is due within 15 days of the invoice date.
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Definition
Scope Creep
Scope creep is the gradual expansion of a project's requirements beyond the original agreement, often without corresponding increases in budget or timeline.
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Definition
Retainer
A retainer is a recurring payment agreement where a client pays a fixed fee (usually monthly) for ongoing access to a set number of hours or services.
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Definition
Accounts Receivable
Accounts receivable (AR) is the total money owed to a business by clients for invoiced work that has not yet been paid.
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Definition
Invoice Aging
Invoice aging is a report that categorizes outstanding invoices by how long they have been unpaid, typically in 30-day buckets (current, 1-30 days, 31-60 days, 61-90 days, 90+ days).
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Definition
Effective Hourly Rate
Your effective hourly rate is your total revenue divided by total hours worked (including non-billable time), showing what you actually earn per hour of work.
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Definition
Payment Terms
Payment terms are the conditions under which a seller expects to be paid, including the due date, accepted payment methods, late fee policies, and early payment discounts.
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Definition
Late Fees
Late fees are penalties charged to clients who do not pay invoices by the due date, typically expressed as a monthly percentage of the outstanding balance.
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Definition
Time Tracking
Time tracking is the practice of recording how time is spent during work, typically by logging hours against clients, projects, or tasks for billing, productivity, or payroll purposes.
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Overdue Invoice
An overdue invoice is an invoice that has not been paid by the due date specified in the payment terms.
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Definition
Statement of Work
A statement of work (SOW) is a formal document that defines the scope, deliverables, timeline, and payment terms for a project or engagement.
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Definition
Days Sales Outstanding
Days sales outstanding (DSO) measures the average number of days it takes to collect payment after an invoice is sent.
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Definition
Non-Billable Hours
Non-billable hours are work hours spent on activities that cannot be charged to a client, such as administrative tasks, marketing, invoicing, and professional development.
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Definition
Recurring Invoice
A recurring invoice is an invoice that is automatically generated and sent at regular intervals (weekly, monthly, quarterly) for ongoing services or retainers.
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Definition
Cash Flow
Cash flow is the movement of money in and out of a business over a specific period. Positive cash flow means more money is coming in than going out.
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Definition
Change Order
A change order is a formal request to modify the scope, timeline, or budget of a project after work has already begun.
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Start here
Pick the page that sounds like your week. Then try a real billing cycle.
The best test is the obvious one: take the workflow that sounds closest to your actual work, run a real client week through Clockout, and see what gets easier.