Why it matters
It can be important for manufacturers, builders and professional practices whose work crosses accounting periods. Records of progress, costs, billing and contractual terms help determine the right accounting treatment. The approach depends on the activity and applicable accounting rules; a generic percentage applied to all open jobs may not be reliable.
A practical example
A consultancy has spent time on a project that is not yet fully billed at month end. The team needs to understand the contract, progress and recoverability rather than assuming every recorded hour becomes an asset at the full selling rate. Project records support the assessment.
A common misunderstanding
Unbilled work is not automatically profit or cash available to spend. Nor is the WIP figure simply the total value of every unsigned quotation. Separate committed work, costs incurred, recognition of income and the chance of collecting payment.
General information for UK readers, updated 3 November 2026. Examples are illustrative. Tax treatment depends on the facts and current rules; seek advice before making a decision.