Tracking Work in Progress For Unbilled Activity Slips
There will often be times when you have entered activity slips for work you've performed for your clients, for which you have not yet billed them at the end of the month. In an accrual accounting system, you have earned income when the task is performed or the goods are delivered, even if you have not billed your client or received payment.
To track this accrued income in AccountEdge:
Create two new accounts in your accounts list: an income account called "Work in Progress - Income" and an asset account called "Work in Progress - Accrued"
At the end of every month, print an Activity Slip [Activity Summary] Report. Using report customizations, be sure to include all activities on the report and enter the dates of the first and last day of the current month in the 'Dated From' and 'Date To' fields. When you print the report with this information, the total in the Balance $ column is your month-end Work in Progress amount.
Create a general journal entry to enter the value of this month's work in progress in your books: (1) enter the date of the last day of the current month in the Date field (2) enter the month-end work in progress amount from the report you printed in step 2 as a credit to the Work in Progress - Income account (3) on the next line, balance the transaction by entering the same amount as a debit to the Work in Progress - Accrued account (4) record the transaction. This entry increases your income on your profit & loss statement and increases the value of your assets on your balance sheet to reflect the month-end value of your work in progress. Hint: Save the WIP general journal entry as a recurring transaction.
At the beginning of the next month: (1) locate the month-end journal entry in your Transaction Journal/General, and reverse the entry (2) enter the date of the first day of the current month in the Date field (3) record the transaction.