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Work in Progress - WIP

The Revenue Recognition Model (Work in Progress) offers several advantages compared to the traditional Invoicing Model:

Accurate Revenue Recognition: The Work in Progress model allows for more accurate recognition of revenue based on the progress of the project. Revenue is recognised as work is completed or milestones are achieved, aligning revenue recognition with the actual value delivered to the client.

Enhanced Financial Reporting: The Work in Progress model provides a more accurate reflection of the agency's financial position. By recognising revenue based on project progress, financial statements can better represent the agency's true performance and the value it has delivered.

Improved Cash Flow Management: With the Work in Progress model, revenue is recognised over the course of the project, providing a more consistent and predictable cash flow. This helps in managing operational costs and maintaining a healthy financial position throughout the project lifecycle.

Work In Progress - WIP

Reduced Revenue Leakage: Invoicing models may lead to revenue leakage, especially if invoicing is delayed or inaccurately calculated. The Work in Progress model ensures that revenue is recognised as work is completed, minimising the risk of missed or underbilled revenue.

Enhanced Client Relationships: The Work in Progress model fosters transparency and trust with clients. As revenue is recognised based on project progress, clients can see the value they are receiving at each stage and have a clearer understanding of the agency's work.

Compliance with Accounting Standards: The Work in Progress model aligns with accounting standards, such as the Percentage of Completion method or other recognised revenue recognition principles. This ensures compliance with financial reporting requirements and maintains consistency in financial statements.

Overall, the Work in Progress model provides more accurate revenue recognition, improved financial reporting, better cash flow management, reduced revenue leakage, stronger client relationships, and compliance with accounting standards. It enables agencies to have a more precise understanding of their financial performance and make informed decisions based on real-time project progress.


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