What is Work in Process?

Mirta Perez and Angie Valdez working on cigar packaging process: Tampa, Florida

Work in process (also called work in progress) is billable work or expenses that hasn’t been billed yet. Work in process is usually expressed in dollar amounts.

Work in process is similar to the list of orders that were delivered, but have not been invoiced yet. Because in the profesionnal services sector, our product is time, then for us work in process is billable time worked, but not invoiced yet.

For profesionnal services companies, work in process is the potential revenue for the current month. It’s essential to know how much potential billings we have in our pipeline.

Now, not all billable work and expenses gets billed. Sometimes, companies can decide not to bill for some work. With a good work in process report, it become much easier and faster to figure out where the company stands, revenue-wise.

As work and fees get billed, they are removed from the work in process list. Normally, once a billing cycle is completed, the work in process list (the WIP) should be empty or almost empty.

With an automated integrated system, businesses don’t have to build the work in process list or purge it manually. As billable time gets logged by team members, it fills up the work in process automatically. When the invoices are generated, the items invoiced at also automatically removed from the work in process.

Here is an example of a WIP report.

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