MSP KPI Definition
MSP Project Debt: Definition & Formula
Project debt is remaining project work that consumes delivery capacity without producing additional billable hours. In this operating definition, it includes remaining rework or commitments the MSP must absorb. It is not an accounting liability measure. Illustrative example: three projects with 6, 9 and 5 remaining nonbillable hours create 20 hours of project debt.
By MSP Fuel · Examples are illustrative.
Target interpretation
Context matters
Set the target against your service scope and company plan.
Formula
Project debt hours = sum of estimated remaining nonbillable project work
Why it matters
A project can look closed financially while still drawing on the team’s schedule.
Hidden nonbillable work reduces capacity available for new paid projects.
Common mistakes
Counting already completed rework in a remaining-hours measure.
Assuming every change request must be absorbed without checking the agreement.
Removing debt from the report without resolving the client commitment.
What moves the number
Assign an owner and completion estimate to each remaining commitment.
Separate estimation errors, rework and approved scope changes.
Feed recurring causes back into design, scoping and project acceptance.
Related MSP Fuel resources
Your company plan sets the target, priority and timing for improving this number from your current position.