The value of the Work in Progress provides insight into the hours/costs that have been spent in relation to the invoiced revenue.
A positive Work in Progress means: more hours/costs have been spent than have been invoiced in revenue. This indicates that work has been carried out, but not yet invoiced.
A negative Work in Progress means: more revenue has been invoiced than the hours/costs spent. This suggests that additional hours/costs will likely need to be incurred.
Ideally, Work in Progress should be as close to zero as possible, or at least as low as possible.
This overview page presents the following information in both KPI and table form:
Total value of hours spent per relationship, per project
Total value of corrected hours and costs
Total value of spent costs (purchases)
Total value of invoiced revenue
Balance of the Work in Progress
The report can be displayed in two ways:
Per project
Per service (also displays values per project, broken down by service and revenue group)
You can choose the display using the toggle at the top of the page:
The values at the top of the page are totals of the columns in the table below. For example: you see a total of hours spent amounting to 616,014 euros. This amount is also broken down by project in the table below under the same title: Hours spent.
Note: The report shows data up until today. Future hours recorded will not be shown, as they are not yet part of the Work in Progress.
Below you’ll find an explanation of the information shown per KPI/data point.
Billable Hours
This is the total sales value of all hours registered in the selected period. Future hours are not included.
The formula: number of hours x hourly rate.
Note: Hours registered based on post-calculation, where the "invoice" checkbox for the respective hourly type is not checked, will not be included in "hours spent" in this report.
Corrected Hours
This is the total amount of all corrections made to hours. Corrections can be either positive or negative. This value shows the sum of all corrections.
Effectively, the sum of the columns Billable Hours and Corrected Hours reflects the value of hours expected to be invoiced.
Costs Spent
This is the total amount of all costs registered, including the margin set on the cost type. In other words: the sales value of all costs.
Example: You hire someone for 1,000 euros and charge 1,200 euros. Your margin is 20%. This is set on the cost type of the respective service for the project. When you record a purchase invoice of 1,000 euros in Simplicate, it will result in a Costs Spent value of 1,200 euros. If you purchased for 500 euros, the Costs Spent value would be 600 euros.
Formula: Registered costs + any set margin = total costs spent.
Note: With active project purchase connections with Exact or Twinfield, “to be processed” project purchases are also included in the total calculation. These costs might not be included in the tables of this report yet because no service is registered, but they will be included in the total calculation as they’ve been booked in the project’s accounting system.
Invoiced
This shows the total invoiced revenue for the chosen period. This amount includes any credit notes.
Good to know:
Amounts shown are always exclusive of VAT and include only invoices sent from Simplicate.
Periods are determined by the invoice date (not any differing booking date).
Work in Progress Balance
The Work in Progress balance shows the difference between the hours and costs spent versus the invoiced revenue.
The main formula for the Work in Progress value is:
The sales value of all billable hours (+ any corrections) + the sales value of spent purchases (+ any corrections) - the invoiced revenue.
It shows exactly whether your invoiced revenue aligns with the hours and costs that have already been spent.
What Does the Work in Progress Value Tell You as a Service Provider?
A positive Work in Progress
A positive Work in Progress means: more billable hours/costs have been spent than have been invoiced.
Conclusion:
Work has been done, but not yet invoiced. Watch this value closely because if it's noticed too late, it can reduce the customer's willingness to pay for these hours/costs.
A negative Work in Progress
A negative Work in Progress means: more revenue has been invoiced than has been spent on billable hours/costs.
Conclusion:
Additional hours/costs will likely need to be made for which the customer has already paid.
Or: the project has turned out favorably, and the client has paid more than what was actually spent.
TIP and ADVICE
Ideally, the Work in Progress value should be as close to zero as possible. At the very least, it should be as low as possible so that the hours and costs spent are optimally covered by the sales invoices.
Work in Progress Example Calculation
In this example, we work through the calculation of the Work in Progress balance.
On the above project, a total sales value of hours (hours x hourly rate) has been recorded of 50,675 euros. A positive correction of 1,200 euros has been made. Therefore, the total sales value of hours is:
50,675 + 1,200 = 51,875 euros.
Costs have been spent, with the sales value (purchase + margin) amounting to 5,000 euros. The costs have not been written off, so no correction applies. The total sales value of hours + costs is:
51,875 + 5,000 = 56,875 euros.
So far, 104,800 euros have been invoiced. Therefore, the Work in Progress is:
56,875 - 104,800 = -47,925 euros.
Conclusion: 47,925 euros more have been invoiced than the hours + costs that have been spent so far. Therefore, either more work needs to be done, or the project has turned out very favorably—just not for the Municipality of Utrecht.