Measuring Aged WIP and WIP with Xero Practice Manager

WIP days or a traditional view of aged WIP isn't meaningful anymore for any practices that generate invoicing in advance. This is mostly because of unallocated 'interim' invoices that associate with jobs and sit as negative WIP entries offsetting what otherwise 'old' time entries. Most modern practices have some percentage of their engagements invoiced in advance either via fixed monthly fee, 100% in advance, a deposit or progress invoice.

If you'd like an example of what Aged WIP would look like for your practice you can run a (useless) Aged WIP report from XPM by going to Reports>Reports>Aged WIP. Look for any of the clients/jobs you invoice in advance and you will see an example of why this is no longer a meaningful way to view WIP.

So what can be done by you and your team to identify and address stagnant WIP?

The most effective method is to run a WIP Movement report for 'Last Month to Date'. This will always include 30-60 days of WIP in the opening balance. By applying a sort on Closing WIP high>low we're looking for large closing WIP balances that have very little activity on them. This is what stagnant WIP looks like.

Drill into the closing WIP balance, see who/when we last worked on this job and follow it up to progress it to invoice.

You can further enhance this report by filtering out your engagements invoiced in advance using an XPM Job Category. This would include any deposit, 100% in advance or retainer based invoicing engagements. This would allow you and your team to focus on just the WIP they can control and the ones that are most likely to turn into money.

Another related issue you might be interested in is forgotten jobs. These are best found using the Open Jobs report adding the hidden field 'Days Last Timesheet'. Sort by WIP balance high>low. Here we are looking for high days last timesheet ie 30+ with large WIP balances.