Accounting for Work In Progress (WIP)

Mar 5, 2018

What is the best way to dispose of WIP that will not be billed?

It is not a good idea to simply delete a time record since this time was actually spent working on a client and will disappear, and as a result, will not be properly recognized to reflect a true realization rate for the client.  In Mango Billing, we do allow time 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 records can also be set to Non-Billable, which will show the amount for each time record as a write down.

There are 3 methods to release time records: 

1.  Create a $0.00 Invoice

 

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.

 

2.  Mark all associated time records as Non-Billable

 

Create a Manual Invoice in Mango Billing.

In the Short Description enter Writing off WIP.  (or use a predefined Short Cut Code, See Help Article for create Short Cut Codes)

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.  In the Client View > Invoices > Slip History and the associated Time Slips that were written off will be available for review.  Methods 1#1 and #2, for the client, will now have an accurate Realization Rate.

 

3.  Delete time records.

This method is not recommended for tracking time accurately for a client.  The realization rate will not be accurate.  Mango Billing does allow time records to be deleted or edited as long as they have not been billed.

 

We hope this explains how to handle time records in Mango Billing.  What is the best method for accounting for work in progress.  If you have a suggestions, please leave your comment below.

 

Tim Sines, CPA
CEO/Founder
Mango Billing, Inc.

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