Review work in progress, billing, and realization

Direct answer

For this review, connect billing management to time capture, WIP, invoicing cadence, collections, realization, and cash flow.

Why this question comes up

Firms need to bill accurately, manage WIP, collect faster, and avoid revenue leakage. This guide turns that concern into a review that can be repeated with a defined period, consistent inputs, and a visible trail back to the records.

Records to gather

• Time and expense recorded but not yet invoiced
• Invoices issued with any write-offs or write-downs applied
• Engagement terms — fixed fee, hourly, capped
• Ageing of WIP by engagement
• Cash collected against invoices issued

Review workflow

1. Follow the full chain. Hours worked, hours billable, hours invoiced, amount collected. Each step leaks and each leak has a different cause. Realisation measured only at invoicing misses the collection stage.
2. Age the WIP. Unbilled work over 60 or 90 days old is materially less likely to be billed at full value. Old WIP is usually a write-off waiting to be recognised.
3. Separate write-downs from write-offs. A pre-invoice write-down is a pricing or scope decision. A post-invoice write-off is a client or quality problem. They need different responses.
4. Analyse by engagement and by partner. Realisation problems concentrate — usually in particular engagement types or particular relationships.
5. Check against the engagement type. On a fixed fee, hours above the fee are not a realisation problem; they are an estimating or scope problem. Do not conflate them.
6. Recognise WIP is not revenue. Until it is billed and collectable, it is work performed at your own risk.

What a useful answer should include

• The full chain from hours worked to cash collected, with leakage at each stage
• WIP aged by engagement
• Write-downs and write-offs reported separately
• Realisation by engagement type and by owner
• Fixed-fee overruns treated as estimating, not realisation
• Confirmation that WIP is not being reported as revenue

Common failure modes

• Measuring realisation only at invoicing. It ignores collection, which is where the rest of the leakage is.
• Letting WIP age unexamined. Old WIP rarely bills at full value and the write-off is only deferred.
• Combining write-downs and write-offs. Different causes, different fixes, one meaningless number.
• Treating fixed-fee overrun as realisation loss. It misdirects attention away from estimating and scope control.

Community context

The linked community posts show why people search for this topic and which parts create confusion in practice. They are anecdotal. Use the reference sources and your organization’s policies for accounting treatment, tax, compliance, and final decisions.