Glossary · Accounting
Unbilled revenue
Also called Accrued income, Work in progress (WIP), Contract asset
Unbilled revenue is work already done and earned but not yet invoiced. It can’t be collected until it is billed.
Unbilled revenue arises when revenue is recognised before the invoice goes out — hours worked during the month, a milestone reached but not yet billed. It is recorded as an asset: accrued income, work in progress or, under IFRS 15, a contract asset.
From a collections point of view it is the earliest stage of cash being stuck. No customer can pay an invoice that doesn’t exist, and every day of delay in billing adds a day to the time you wait for cash.
Professional services firms track it as WIP days, part of lock-up. Billing promptly — at milestones or monthly, not at project end — is the fix.
Example
On 31 March, a firm has 180 hours of March work at €110 an hour not yet invoiced: €19,800 of unbilled revenue. It invoices on 2 April, and the 30-day clock starts then.