Accounting for Work In Progress (WIP)
What is the best way to dispose of WIP that will not be billed?
It is not a good idea to simply delete a WIP record since this time was actually spent working on a client and will disappear, and as a result, not be properly recognized to reflect a true realization rate for the client. Mango Billing will allow WIP records to be deleted, as long as the record has not been invoiced. However, we feel the best way to dispose of time slips that will not be invoiced, is to create a Manual Invoice with a $0 amount due.
The following steps is the recommended method for disposing of WIP that will not be invoiced to the client:
Create a Manual Invoice in Mango Billing.
In the Short Description enter Writing off WIP. (or use a predefined Short Cut Code)
In the detail line item section of the invoice enter a miscellaneous Service Code and enter ‘$0’ for the amount.
Review the Time Slips, and Exclude all records that you do NOT wish to have removed from WIP.
Process the invoice and process as Finalize Only.
The invoice will be saved to the client with a $0 balance due. The beauty of this method is that at any point in time this invoice can be reviewed in the Client View > Invoices > Slip History and the associated Time Slips that were written off will be available for review. More importantly the client will now have a more accurate Realization Rate.
Tim Sines, CPA
Mango Billing, Inc.