What is work in progress (WIP) in an accounting firm?

WIP is income the firm has earned but not yet invoiced. It builds up whenever work is done before the bill goes out, which is most of the time in tax season.

Watching WIP tells a firm how much revenue is waiting to be billed, which engagements are running over budget, and which clients haven't been invoiced for work finished weeks ago. Old WIP is a warning sign: the longer work sits unbilled, the more likely it is to be written down.

Firms usually review WIP alongside accounts receivable (A/R) aging, the invoices that are billed but unpaid, because together they show the full path from work done to cash collected.