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Cost Based Work in Progress FAQs

Work In Progress Accounting FAQs

Ensuring Accurate Unbilled WIP Amounts Best Practice Guide

Work In Progress

Managing work in progress -- the job’s unbilled costs, time, and expenses -- is completely automatic. There are three ways to look at work in progress: from jobs and tasks, from the costs themselves, and from the general ledger. Each has important distinctions, and all three work together to track your billable costs. Anyone with access to costs can edit work in progress.

Work in progress is primarily a function of job billing. Adding costs starts the work in progress system.  A cost, whether it is a vendor purchase, a time entry, a check, or an out-of-pocket expense is given a job number and a task. The cost’s net and gross amount (which include your markup) are posted to a job task. Billing is based on the job task’s unbilled amount. When you bill a job, its tasks are copied to the invoice -- including their billable amounts. You can freely change the invoice’s billing amount up or down, regardless of the task’s actual costs. So billing isn’t literally connected to a job’s costs.

Costs track when they’re billed automatically. When you bill a job, the task’s billing amount is applied to its costs. The billing amount updates the oldest cost first, then works forward through the remaining costs. You can find a cost and see its billing information: the invoice date, amount billed, and invoice number. For more accurate job costing, costs can have a billing status (e.g., unbilled, billed, or partial). Costs can be flagged with a billing status to keep them from being billed (e.g., on hold, unbillable). Work in progress reports show either unbilled job tasks or costs to help you plan your invoices better.

To see a job’s work in progress

1 From the Job Ticket window, select WIP from the View>Point pull down menu.

Costs for all of the job’s tasks are listed by task. Only the gross amount (the amount that includes commissions and markups) can be edited. Changing the cost’s gross amount updates the task’s unbilled amount -- which affects how much will be billed to the client.

To verify a job’s cost billing status

The Verify shortcut verifies that the billing amounts are correctly applied to the job’s costs. Billing amounts are usually applied to costs when the client’s invoice is added. If jobs are pre-billed, however, the billing amounts can’t be applied since they haven’t been entered yet. In this case the job’s costs will appear as “unbilled” even though the job has been pre-billed. The solution is to use the Verify shortcut to reapply the job’s billings to its costs. To verify the job’s billing status, click the Verify button.

To change a cost’s billing status

Every cost gets the same unbilled status when it is posted, unless its task is unbillable. There are standard billing statuses (e.g., Unbilled, Unbillable, On hold, Billed, Write-off, Partial, and Canceled) plus you can create your own. Change the cost’s billing status, then press tab to save it. Repeat these steps for other costs, then click Save.

To transfer a job’s unbilled costs

1 From the Work in Progress window, click the Transfer Now button.

One-click cost transfers. Clicking the Transfer Now button transfers a job’s costs to any selected job. The dialog box gives you the option to transfer net amounts only or both net and gross amounts.

2 Enter the job number to which these costs should be transferred.

Any open job can be chosen to get the transferred costs. Ordinarily, the net amounts (i.e., the agency’s actual cost) stays on the original job for more accurate job costing; only the cost’s gross (i.e., billable) amount appears on the other job. Use the transfer net amounts option to move both the cost’s net and gross amounts to the other job ticket.

To write off a job’s unbilled costs

A job’s unbilled costs can be written off in a single click. The Write-off shortcut changes the status on the job’s unbilled costs from “unbilled” to “write-off.” The costs’ gross amounts are erased from the job ticket, keeping it off billing worksheets and other pre-billing reports. Writing off unbilled costs doesn’t affect the General Ledger, since it was already updated when the costs were posted. To write off the job’s remaining unbilled costs, click the Write off button.

To instantly bill a job’s unbilled costs

A job’s remaining unbilled costs can be instantly billed by clicking the Bill Now button. The Bill Now function creates a Progress/Final invoice for the job’s unbilled costs. The invoice is unposted, so it can be proofed and posted like other invoices. To bill the job, click the Bill Now button.

To print the job's work in progress

Click the Print button to print the information in the work in progress window.