What is the difference between Hours and Client Hours?

CORE records two time fields with each time entry, Hours and Client Hours. Client Hours (billing hours) are billed to the client. 'Hours' are actual hours worked by an employee on a task and would count toward the payroll of the employees. By default, Client Hours take up the same value as the Hours field. When both the Hours as well as Client Hours columns are visible, they behave as independent fields when it comes to updating the hours. When one of the columns is hidden in Time Entries, they are dependent and and the changes reflect on the other automatically. So editing one column value also updates the other hidden column. 

When you enter Hours for time entries, that gets copied to the Client Hours field too, but the value can sometimes be slightly different. The difference is more visible after it accumulates in the running totals at the bottom in the Time Entries screen. This happens if you have checked the option Apply to Client Hours only for Smallest time increment for time entry in Settings > Time & Expenses > Time Entry. This option applies the smallest time increment to client hours only and not the actual hours being recorded. For example, if the smallest time increment is 0:15 (15 mins = 0.25 hours) and you enter 7.21 in Hours, it also copies to Client Hours, but on saving the time entry, Hours still shows 7.21, but Client Hours shows 7.25, changing to the nearest value allowed by the time increment. To make the Hours and Client Hours fields consistent, you should un-check the option that applies the time increment to Client Hours only. 

In some cases, you can deliberately keep the Client Hours more or less than the Hours. Suppose a new employee is working on a project and isn't up to your usual quality of work and expectations. You can enter Hours as usual, but leave Client Hours blank or enter less hours for it. This way, the employee receives the credit for working, but the client isn't fully billed for the activity. 

Regarding employee performance reports, the difference between the actual hours worked and billable hours does have an impact. This difference between Hours and Client Hours affects the profit shown for that employee. In the report, the cost reflects, say, 54 hours of work, but the bill rate reflects, say, 51 hours instead of 54. Had those 3 hours been billed, the employee would be credited with a larger profit.

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