Sometimes we may do work for related entities and not invoice them for this. This could be a partner's trust, another accounting practice that is wholly owned, or an overseas practice which we look after some clients through. Not invoicing these jobs and clients in the normal fashion presents some challenges:
1. WIP only goes up or is inflated, inflating our practice WIP balance.
2. The revenue and efforts of our team are not attributed to people or services.
3. Our people appear unproductive when they work on these jobs.
Fortunately there are at least two good options for managing these type of engagements:
1. Set up a client custom rate at $0 so that this work is identified as 'billable' ie not internal but will not accrue WIP. Staff who work on these jobs will appear as productive however their billable values generated will be lower. There will be no effect of any write ons/offs.
2. Set up a job as normal and generate a dummy invoice for the billable value. Credit this out in your Xero (blue). The benefit of this is as 1 above, staff who work on this are billable however their billable time value will not be lower than expected. You also have the option of recognising write ons/offs here if you need to by adjusting the invoiced value.
In both instances above using a Job Category to identify this work will help you exclude these jobs where necessary from your WIP, Client and Job reporting.