WIP Accrual — Month-End Timesheet Hours Not Yet Billed
Accruing month-end work in progress for hours worked by fee earners but not yet invoiced to the client.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Unbilled Receivables / Contract Asset (WIP) | Asset (+) | 8,500.00 | - |
| Professional Fee Revenue | Revenue (+) | - | 8,500.00 |
💡 Accountant's Note
Accrual-basis firms must recognize revenue as work is performed, not when billed. WIP represents hours approved on timesheets at the month-end but for which no invoice has yet been raised. It is reclassified to Accounts Receivable when the invoice is issued.
Practitioner & Systems Framework
💻 ERP Architecture
The WIP accrual is generated automatically by the practice management system — at month-end close, the system freezes the approved timesheet pool and calculates unbilled hours × billing rate per matter. This becomes the WIP balance at the reporting date. The key operational control is the timesheet submission and approval deadline: all hours for the reporting month must be submitted and approved before the WIP report is extracted. Late timesheets submitted after the WIP snapshot date should be included in the next period, not backdated. For multi-office firms, the WIP report must consolidate all offices and ensure no double-counting where multiple fee earners work on the same matter.
⚠️ Audit Flags
(1) Post-period timesheet entry — auditors test for timesheets submitted and approved after month-end that have been backdated into the prior month, artificially inflating WIP. (2) WIP aging — WIP older than 90 days without a billing or write-down decision is a quality concern. Auditors request an aged WIP schedule and challenge balances with no recent activity. (3) Realization testing — compare WIP to subsequent billing: if WIP recognized in December is invoiced in January at a lower amount than the WIP balance, the difference is a write-down that should have been recognized in December.
📄 Required Documentation
Approved timesheet report at month-end cutoff, WIP aging schedule, partner review sign-off, billing rate card per fee earner, subsequent billing confirmation, and write-down decision documentation.
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.