Agency work in progress belongs in a billing-readiness view, not in an issued-invoice collections forecast. Move an amount into the AR forecast only when the authorized accounting source shows an issued customer invoice with a remaining open balance. WIP, unbilled sales, draft invoices, and invoice proposals can inform future billing, but they are not the same receivable or the same cash event.

Microsoft's project-invoice documentation separates time-and-material unbilled sales transactions from the invoice-proposal process. Its broader project invoicing guide describes WIP and preliminary invoice proposals that are reviewed before a customer invoice is posted. Agencies using other systems still need the same state boundary.

Use five visible stages

Classify each project amount as:

  1. **Work in progress:** Work or cost evidence exists, but the amount is not yet ready to bill.
  2. **Unbilled or ready to bill:** A billable amount is supported and awaits the agency's billing process.
  3. **Draft or proposal:** Finance is reviewing a proposed customer invoice.
  4. **Issued and open:** The customer invoice is posted, appears in the authorized AR source, and has a remaining balance.
  5. **Collected:** A receipt is applied and supported by the source.

Only Stage 4 starts as the population for an invoice-level collections forecast. Stage 5 is observed cash. Stages 1 through 3 belong in a separate billing backlog so management can see upcoming invoice potential without double counting it as open AR.

Build a WIP-to-AR handoff

For every amount approaching billing, preserve the project or engagement reference, billing method, covered period, client approval state, purchase-order or budget evidence, internal owner, proposed invoice date, and next action. When the invoice posts, add the invoice number, invoice date, due date, open amount, and source-row reference.

The agency approval-blocker guide identifies milestones and client approvals that can delay billing. The professional-services unbilled-sales guide provides a related boundary for service firms, while the invoice-proposal guide keeps preliminary billing records outside open receivables.

Prevent two common forecast errors

First, do not place both the proposed invoice and the later posted invoice into expected cash. They represent one commercial amount at different stages. Second, do not assign a customer collection week to WIP based only on an internal target invoice date. Billing readiness and customer receipt timing need separate evidence.

Once an invoice is issued and open, use the four-week AR forecast workflow to assess due date, payment history, promise, dispute, portal status, and other current evidence.

Decision rule

Keep WIP and invoice proposals visible upstream. Start the collections forecast with the issued open-invoice population, then assign timing without duplicating the same project value across stages.

AR Pulse analyzes an authorized QuickBooks receivables export. It does not estimate agency WIP, post invoices, or change accounting records. Agencies with issued open invoices that need a ranked action list and four-week collections range can apply for AR Pulse.