A write-down is a deliberate reduction of the time billed to a client below the time actually recorded. In agency and professional-services billing, it usually happens when a task took longer than the work was worth, so you invoice for fewer hours than your team logged. The recorded time stays on file; only the billed amount drops.
Write-down vs write-off
These two terms are often confused, so keep them firmly in the services context rather than the medical-billing one. A write-down trims the billable value. A write-off removes it.
| Term | What happens | Client billed? |
|---|---|---|
| Write-down | Billed time reduced below recorded time | Yes, for part of it |
| Write-off | Billable value cancelled entirely | No |
A worked example
Suppose a designer records 10 hours on a logo at a 150 per hour rate, giving a recorded value of 1,500. You quoted the client roughly 8 hours of work, so you bill 8 hours, or 1,200. The 300 difference is the write-down.
Recorded value 1,500, billed value 1,200. Write-down of 300, or 20 percent of the recorded value.
That gap is exactly what realisation measures. The more you write down, the lower your realisation, even when your team is busy and tracking diligently.
Why write-downs happen
- Scope creep: the job grew but the fee did not.
- Under-quoting: the estimate was too low to begin with.
- Rework: internal mistakes you do not want to charge for.
- Goodwill: a discount to keep a long-term client happy.
None of these mean the work was wasted. They mean the value you can invoice is lower than the value you produced, which is useful information when you next quote similar work.
Related terms
Write-downs are the main driver behind a falling realisation rate, and they sit alongside your billable hours and utilization rate as the numbers that explain agency margin. To see how recorded hours turn into billable value before any write-down, run the effective hourly rate calculator.