Work in progress is a project report of effort, costs, or earned fees not yet fully billed or reconciled.
Definition
Work in progress, or WIP, commonly tracks project effort or costs incurred that have not yet been billed, sometimes alongside contract value, billed amounts, and earned fee estimates. Firms configure WIP reports differently: they may track labor hours, labor cost, expenses, percent complete, or revenue recognized under their accounting method. A report can flag work ready to bill, billing ahead of progress, or effort exceeding the fee budget, but the labels and calculations depend on firm practice. Owners review WIP to understand project status, billing timing, and potential scope or budget issues. WIP is not necessarily a balance sheet asset at the amount shown, and it is not simply the same as backlog, accounts receivable, or cash. Some earned amounts may not yet be invoiced, while billed amounts may exceed work performed. See how to invoice civil engineering clients and how to track project budget to complete for related operating topics.
How owners use it
- Review project-level unbilled effort and earned fee information before preparing invoices.
- Compare actual labor or costs with budget and remaining work to identify projects needing attention.
- Example: A project has $48,000 in earned fees and $35,000 billed, leaving $48,000 - $35,000 = $13,000 of earned but unbilled fees.
- Confirm whether the report shows hours, cost, earned revenue, billed amounts, or a combination before interpreting its balance.
