Why WIP Is the Most Under-Managed Number in Your Firm
Work in progress sits on the balance sheet as one of a firm's most significant assets, the value of work already done but not yet invoiced. And yet, in most firms, WIP is also one of the least actively managed numbers in the business. It gets a proper look at quarter-end, or when a partner asks about it directly, and otherwise sits quietly in the background until write-off season arrives and all the bad news lands at once.
That's the pattern worth interrupting. Because by the time a job is being written off, the decision that led to it, letting WIP sit unbilled and unmanaged for too long, was effectively made months earlier, when nobody was watching closely enough to intervene.
Why WIP tends to be under-managed
Part of the reason is structural. Unlike debtors, where an overdue invoice is a visible, uncomfortable fact staring back at you, ageing WIP is invisible until someone specifically goes looking for it. There's no automatic prompt. A job can sit unbilled for sixty or ninety days without triggering any kind of alert, simply because nobody happened to check.
The other part is capacity. Reviewing WIP properly, by client, by partner, by age, takes time to pull together manually, and in a busy practice, that kind of proactive review is often the first thing to get deprioritised in favour of urgent client work.
What an early warning system actually looks like
The fix is treating WIP ageing the way a good collections process treats overdue debtors, as a live, ongoing view rather than a periodic check-in. Breaking WIP into ageing bands, from under seven days through to ninety-plus, by client group and job partner, turns an abstract "we should look at WIP sometime" into a specific, visible list: these particular jobs, for these particular clients, are sitting in the riskiest bucket right now.
That distinction matters enormously. A partner looking at a single WIP total has no way to prioritise action. A partner looking at a breakdown by ageing bucket knows exactly where to start, the jobs approaching ninety days, before they become the write-offs nobody can explain at year-end.
Interim billing is part of the same story
Unallocated interim billing, progress payments received but not yet matched against WIP, is a closely related blind spot, particularly for firms that bill progressively through a job rather than at completion. Poor interim billing hygiene can mask the true state of WIP just as effectively as ageing itself, making a job look healthier, or a client relationship look more current, than it actually is.
From reactive to proactive
The difference this makes in practice is significant. Instead of discovering at year-end that a chunk of WIP needs to be written off, a partner reviewing an aged WIP view weekly or monthly can intervene while there's still time to act, a conversation with the client, an interim bill raised, a decision to write down a smaller amount now rather than a larger amount later.
The firms with the healthiest WIP aren't the ones with the least risky client base. They're the ones who are watching the ageing buckets continuously, rather than finding out how healthy their WIP was after the decision to write it off has already effectively been made.
Frequently asked questions
Why does WIP often go unmanaged in accounting firms? Unlike overdue debtors, ageing WIP doesn't create an obvious prompt to act, so it can sit unbilled for months without anyone specifically checking on it.
How can firms reduce WIP write-offs? By reviewing WIP broken into ageing buckets regularly, so jobs approaching 60 or 90 days can be actioned before they turn into a write-off.