Work in Progress (WIP): What Project-Based Businesses Should Review
A project can be underway, partly billed, and still require substantial work before delivery. A simple work-in-progress (WIP) review helps the owner and bookkeeper see which jobs are active, what has happened so far, and what needs attention. The term is used differently across industries, so define what your WIP list tracks before relying on it.
What a practical WIP list can show
For a service firm, an operational WIP schedule may include the client and project, contract or approved scope, start and target dates, project status, work completed, invoices issued, cash collected, known costs to date, and an estimate of work or costs still to come. The list is a management view of open work. It can flag a project with delivery activity but no recent invoice, a milestone awaiting approval, or contractor costs that have not yet been billed to the client.
A monthly three-part review
1. Confirm the project is still active. Check scope changes, deadlines, approvals, and any pause or cancellation.
2. Compare activity with billing. Review time or production records, deliverables completed, invoices sent, deposits or retainers received, and amounts still due.
3. Look ahead to remaining effort and costs. Ask whether the original estimate still fits the work left and whether a change order, billing milestone, or staffing decision needs attention.
WIP tracking is not automatically revenue recognition
A project tracker can help organize delivery and billing facts, but it does not by itself determine when revenue is recognized, how deposits are recorded, or whether a formal WIP calculation is required. Those answers depend on the contract, accounting method, applicable standards, and business type. Confirm accounting treatment with the responsible accountant or tax professional; do not use a spreadsheet status as a substitute for that judgment.
Example: spot a billing gap early
Suppose a design project is at its second milestone, the team has completed the agreed work, but the milestone invoice has not been sent because approval is pending. The WIP review surfaces a follow-up item and an owner. It does not declare that the milestone revenue has been earned; the agreement and accounting method still govern that treatment.
Make open work easier to review
If your open projects, invoices, and project costs are tracked in different places, email SVS about project reporting to ask what can be organized within your current bookkeeping scope.
For help organizing these records, explore project cost accounting for creative businesses and monthly bookkeeping, or request a quote by email.
This article is general educational information, not accounting, tax, or legal advice. WIP requirements and revenue treatment vary.
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