Work in progress

Work you have done and not yet billed. Real value that is invisible in the bank.

What it means

Work in progress is the cost, and sometimes the value, of jobs part-completed at a period end.

Why it matters

Without it, a business that did a great deal of unbilled work in December looks like it had a terrible month. With it, the accounts reflect what actually happened.

What it looks like in practice

Service businesses track it in hours; construction and manufacturing in materials and labour. Recognising revenue on long contracts follows specific accounting rules.

What to watch out for

WIP that never becomes an invoice. If it sits there for months, either the work is not billable or somebody has forgotten to bill it — both worth knowing.

Where to get proper advice

Your accountant. This is exactly the kind of question they answer in ten minutes and most owners never ask.