What is Work in Progress?
Work in progress, sometimes referred to as work in process or WIP, are goods or services made by a business which are only partly completed.
In a typical manufacturing process, raw materials enter at one end and finished products emerge at the other, the stages in between result in goods in various stages of manufacture and these goods are referred to as work in progress.
The value of work in progress at any stage in the manufacturing process will depend on the raw materials, the amount of labor, and the applied overhead incurred in getting the products to that stage of manufacture.
Work in progress is usually categorized as a current asset of the business and included in the balance sheet as part of inventory.
For further information see the Wikipedia work in progress definition.
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About the Author
Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.