How to manage Work in Progress in VOGSY

Work in Progress (WIP) is a critical concept in professional services. It represents the value of work that has been completed but not yet invoiced. In VOGSY, managing WIP effectively supports accurate financial reporting, cash flow management, and insight into project profitability.

We will now outline how VOGSY manages WIP and offers best practices to ensure accuracy.

VOGSY integrates various aspects of your business from "Quote to Cash," naturally incorporating WIP management into its core workflows. It tracks costs incurred and revenue earned on projects, even before invoicing occurs.

Key elements in VOGSY that contribute to WIP management:

• Project-centric structure: VOGSY organizes all work around projects, that are broken down into deliverables and activities. This structure is fundamental for tracking WIP at a granular level.

• Time and Expense Tracking: This is the backbone of WIP. When your team logs hours and expenses against specific projects and deliverables in VOGSY, this information is automatically associated with the project's costs and contributes to its WIP.

• Billing and Invoicing: VOGSY automates the invoicing process for T&M projects. When invoices are generated, the corresponding WIP is converted into recognized revenue.

• Reporting and Analytics: VOGSY offers specific "Work in Progress" charts and reports that provide insights into your WIP status.

The core of managing WIP in VOGSY is ensuring accurate and timely data entry and consistent processes.

1. Accurate Project Setup:

   • Define Clear Deliverables and Activities: Break down projects into well-defined deliverables and tasks. This allows for precise allocation of time and costs, directly impacting WIP tracking.

   • Assign Proper Rates: Ensure that billable rates for resources and cost rates for expenses are correctly set up within VOGSY to calculate WIP value accurately.

   • Establish Billing Schedules: Define when and how projects will be invoiced (e.g., fixed price, time and materials, milestones). This helps understand when WIP will be recognized as revenue.

2. Diligent Time and Expense Tracking:

   • Consistent and Timely Timesheet Submission: This is arguably the most critical factor for accurate WIP. Encourage and enforce regular and accurate submission of timesheets by all project team members. VOGSY's intuitive time tracking tools (timers, Jira integration, etc.) simplify this process.

   • Categorize Time Appropriately: Ensure time is logged against the correct project, deliverable, and activity, and distinguished between billable and non-billable hours.

   • Accurate Expense Logging: All project-related expenses should be recorded in VOGSY and linked to the relevant project.

3. Invoice Management and Revenue Recognition:

   • Timely Invoicing: Generate and send invoices promptly as work is completed or milestones are reached according to your billing schedules. The sooner WIP is invoiced, the better for cash flow and for reducing the "unbilled" portion of your WIP.

   • Align Invoices with Work Done: Ensure invoices accurately reflect the work completed and recorded as WIP. VOGSY's automated invoicing based on timesheets and deliverables helps ensure this alignment.

   • Revenue Recognition Principles: While VOGSY primarily manages the operational aspects, your accounting team will use the data to apply appropriate revenue recognition principles (e.g., percentage of completion, completed contract). VOGSY provides the underlying data for this.

4. Monitoring and Reporting:

   • WIP Chart (Costs vs. Invoiced): VOGSY specifically provides a "Work in Progress" chart. This chart compares:

     • Actual costs made: The total costs incurred on projects (labor from timesheets, expenses).

     • Amount already invoiced: The revenue that has been recognized through invoicing.

     • What's left to be invoiced: This is your core WIP.

   • Filtering and Drill-down: The WIP chart has filters (by department, time period, etc.) that can be used to gain specific insights. You can also often click on segments of the chart to drill down into project-level details.

   • Project Cards: Each project in VOGSY includes a "Project Card" that provides a comprehensive overview, including financial summaries, budget vs. actuals, and invoicing status. This is where you can see the WIP for individual projects.

   • Financial KPIs and Reports: VOGSY's reporting capabilities allow you to generate custom reports on various financial KPIs, including those related to WIP. You can often export these reports to Google Sheets for further analysis.

   • Budget vs. Actuals: Regularly compare your project budgets against actual time and costs logged. This helps identify projects where WIP might be accumulating more than anticipated, signaling potential budget overruns or delays.

5. Accounting Integration:

   • VOGSY integrates with various accounting packages. Ensure this integration is set up correctly so that WIP data flows correctly into your general ledger for financial statements.

   • Work with your accounting team to understand how VOGSY's WIP data translates into your accounting system's WIP accounts and revenue recognition entries. VOGSY can be configured with specific ledger accounts for WIP postings and periodical valuation.

• Improved Cash Flow: By promptly invoicing work in progress, you accelerate cash collection.

• Accurate Financial Reporting: Real-time visibility into WIP data provides a true picture of your company's financial health, helping in balance sheet accuracy and P&L statements.

• Better Project Profitability Insights: Understanding WIP allows you to assess the actual costs incurred versus revenue recognized, leading to more accurate project margin analysis.

• Reduced Revenue Leakage: By diligently tracking all work, you minimize the risk of unbilled services or forgotten expenses.

• Informed Decision-Making: Clear visibility into WIP helps in forecasting, resource planning, and making strategic decisions about project prioritization and client relationships.

By leveraging VOGSY's integrated features and maintaining rigorous data entry practices, you can effectively manage Work in Progress, enhance financial transparency, and drive better business performance.