UK WIP and accrued income


Joined
Jul 27, 2015
Messages
27
Reaction score
2
Country
United Kingdom
I work for a consultancy company and this is about WIP and accrued income.

Here is the scenario:

We have a master budget, and let's say at the beginning of April we have budgeted 100k of revenue for booked work.

At the end of April we have invoiced 50k all invoiced within the month of April.
In the first week of May, we invoiced a further 25k for April works which missed the month end cut off.
Thus there is 25k still not invoiced for the month of April which is still not yet invoiced (let's say half is complete and half isn't but it's all just not been invoiced as yet).

At this time we prepare the management accounts. Can someone please confirm if the following would be correct treatment as per the scenario I gave above if not could someone kindly correct me:

50k income
25k accrued income
25k WIP

Many thanks in advance all. Appreciate any comments
 
Ad

Advertisements

Joined
Jun 11, 2016
Messages
12
Reaction score
0
Country
United Kingdom
You recognise income once work is done and invoice raised for it = income
If you/company has done the work but no invoice was raised = accrued income
If you/company started the work and it's between 1-99% = WIP

Incase if it's work in progress you can multiple percentage complete by charge rate or contract price.

I hope this explains well
 
Joined
Jul 27, 2015
Messages
27
Reaction score
2
Country
United Kingdom
You recognise income once work is done and invoice raised for it = income
If you/company has done the work but no invoice was raised = accrued income
If you/company started the work and it's between 1-99% = WIP

Incase if it's work in progress you can multiple percentage complete by charge rate or contract price.

I hope this explains well
Thanks yes it does.

So monthly management accounts, work completed in May was invoiced first week in June would be accrued income for May correct?
 
Joined
Jul 27, 2015
Messages
27
Reaction score
2
Country
United Kingdom
I work for a consultancy company and this is about WIP and accrued income.

Here is the scenario:

We have a master budget, and let's say at the beginning of April we have budgeted 100k of revenue for booked work.

At the end of April we have invoiced 50k all invoiced within the month of April.
In the first week of May, we invoiced a further 25k for April works which missed the month end cut off.
Thus there is 25k still not invoiced for the month of April which is still not yet invoiced (let's say half is complete and half isn't but it's all just not been invoiced as yet).

At this time we prepare the management accounts. Can someone please confirm if the following would be correct treatment as per the scenario I gave above if not could someone kindly correct me:

50k income
25k accrued income
25k WIP

Many thanks in advance all. Appreciate any comments
So lastly to answer my original question,

Sales 50k
Accrued income 25k
WIP 25k

???
 
Joined
Jun 11, 2016
Messages
12
Reaction score
0
Country
United Kingdom
At the end of April

Income/sale 50k
Accrued income 25k
WIP (25k x 50%) = 12.5k
 
Ad

Advertisements


Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Similar Threads

UK Accrued and deferred income 3
USA Accruing expenses 2
USA WIP (Work in Process/Progrees) Calculation 1
Wip 0
UK Work in progress and accrued income 1
Interest Income and Accrued Interest 1
USA Accrued Fed Income Tax 3
Urgent: WIP? 3

Top