WIP Report

What is a WIP report?

A WIP report, or work in progress report, shows unbilled time and expenses on active client engagements. For service firms billing by the hour, WIP represents revenue earned but not yet invoiced. The report typically shows client, matter, timekeeper, hours, and dollar value at billing rates. Managing WIP is critical for cash flow since unbilled work is essentially an interest-free loan to clients.

Using WIP for billing decisions

Review WIP weekly or at minimum monthly. Identify engagements ready for billing. Investigate WIP that has been sitting unbilled for extended periods. Old WIP becomes harder to collect and may indicate scope issues or client disputes. Some firms set WIP aging thresholds that trigger automatic billing or write-down review. Convert WIP to invoices promptly to improve cash flow.

WIP and financial reporting

For accrual-basis firms, WIP may need to be recorded as an asset. The balance represents work performed but not yet billed. As you invoice, WIP transfers to accounts receivable. Some firms record only billed revenue and track WIP as a management report. Discuss the proper treatment with your accountant. Either way, monitoring WIP helps you understand true profitability and collect for all the work you perform.