What is Work in Progress (WIP)?
WIP is exactly what it sounds like – “in progress,” in other words, not final. Studio Designer considers all items that do not have an invoice to be Work in Progress.
Why should I care?
A couple reasons.
Firstly, it is important to having accurate financial reports. Items in WIP are not considered final. Even if your client has paid in full, items in WIP are not considered to be sold, and will not show on your P&L reports. Any money that has been paid to a vendor on WIP items is categorized as a vendor deposit. Any money received from a client on WIP items is categorized as a client deposit. Sales tax is not recorded because Studio Designer does not consider this to be a sale of an item. When you create an invoice, that item moves out of WIP and onto the appropriate financial reports.
Secondly, accurate WIP reports can help with project management. These reports will show you what items still need vendor payments, what items have client balances, and what items are still in progress and need to be followed up on.
How to keep my WIP up to date By far, the easiest way is to have a process in place that ensures that every item has a final invoice once it is delivered. Once delivery occurs, each item needs to be finalized in Studio Designer by checking that the vendor is paid in full, the vendor purchase price and payment are entered correctly, and then a final client invoice should be generated. This removes the item from WIP and indicates that the item is complete – both physically and financially. You should also be double checking to make sure there are no loose ends in WIP near the conclusion of each project, so that you can invoice any remaining balances to that client. How you should check what is in WIP Very easy – go to reports, and type WIP in the search bar. You will get a report that shows all WIP items – that is, all items that have not been invoiced. Ideally you would review this for each project as you are working through the billing on that project, and especially before installation. I strongly recommend you review this in November or December, and invoice any completed items prior to the year end, in order to record those sales in the appropriate year. Please feel free to reach out to me or my team if you need more information, or help working through WIP.