Overview #
This article explains how to track Work in Progress (WIP) for project-based work using the documents available in AccountingSuite. The approach uses Bills, Journal Entries and Inventory Adjustment to move costs into and out of the WIP asset account, combined with Sales Invoices to recognize revenue when work is completed.
For project-based work – such as construction, custom manufacturing, or service delivery with a material outcome – the accounting objective is to accumulate costs as an asset (WIP) until the work is accepted, rather than expensing them immediately. AccountingSuite with documents Bill, Journal Entry, Inventory Adjustment, Payroll, and Project tagging features allow you to account this process.
Prerequisites #
WIP Account
The standard full AccountingSuite Chart of Accounts includes 14000 Work in Progress (Assets → Other current asset). Use this account, or create a sub-account if you need separate tracking by cost type.
Inventory Accounts
- 13200 Raw Materials – for materials consumed in the project
- 13300 Finished Products – for completed work transferred to inventory for sale
Enable Project Accounting on Relevant Accounts
For each account that will carry project-tagged transactions (including 14000 WIP, 13200 Raw Materials, 13300 Finished Products, and COGS accounts), open the account in Lists → Chart of Accounts and enable By projects. The Project dimension can be applied to accounting entries only if the account is configured to allow it .
Create the Project
Create a Project/Job record and assign it to the relevant customer. The project serves as the tracking container for all WIP-related transactions. Project tagging is available on all documents.
Create the Items for Service and Work
Create Items with Service type and assign G/L account 14000 Work in Progress for Work and any Expenses G/L account for Service without WIP neediness.
Create the Items for Raw Materials and Finished Products
Create Items with Product type and assign G/L account 13200 Raw Materials or 13300 Finished Products.
Scheme of Postings #
| Event | Document | Debit | Credit | Project Tag |
|---|---|---|---|---|
| Purchase work/services for project (direct) | Bill | 14000 Work in Progress | 20000 Accounts Payable | Required |
| Purchase work/services for project (direct) from employee | Expense Report | 14000 Work in Progress | 22500 Employee Payables | Required |
| Purchase Raw Materials for project | Bill | 13200 Raw Materials | 20000 Accounts Payable | Required |
| Reclassify purchased cost to WIP (if initially expensed) | Journal Entry | 14000 Work in Progress | Expense account | Required |
| Consume raw materials | Inventory Adjustment | 14000 Work in Progress | 13200 Raw Materials | Required |
| Reclassify labor and Payroll to WIP | Payroll | 14000 Work in Progress | 22000 Payroll Liabilities | Required |
| Transfer completed work to inventory | Inventory Adjustment | 13300 Finished Products | 14000 Work in Progress | Required |
| Invoice customer for work performed | Sales Invoice | 12000 Accounts Receivable | 40000 Sales | Required |
| Sell finished product (via Sales Invoice) | Sales Invoice | 50000 COGS | 13300 Finished Products | Required |
| OR Relieve WIP directly to COGS | Journal Entry | 50000 Cost of Goods Sold | 14000 Work in Progress | Required |
Tracking and Reporting #
Once transactions are tagged with the Project, use the following reports to monitor WIP and project profitability:
- Project Financials – budgeted versus actual revenues, costs, gross margin, and overall profitability .
- Project Analysis / General Journal – all posted entries affecting the project, including the WIP account balance .
- Project Turnovers – income, expenses, profit, and assets/liabilities including opening balance, turnover, and closing balance. The 14000 Work in Progress balance appears under Assets, allowing you to monitor accumulated WIP per project.