Cash and billing

Unbilled work: the cash you’ve earned but haven’t invoiced

Anna Stafford, AI Accounts. 26 October 2026

If you invoice when a job is finished, your client holds your money for every week the work was running. In a £2.4m business that can be close to £200,000 before a single invoice has gone out.

Take a consultancy with sales of £2.4m a year. That’s about £6,575 of work delivered every day (£2.4m ÷ 365). If a job runs for an average of 30 days before it’s invoiced, about £197,000 of work is done, or part done, and not yet billed on any given day.

Then the invoice goes out and the client takes 45 days to pay, whatever the terms say. That’s another £296,000. Between them, you’re carrying 75 days and about £493,000 of money you’ve earned and can’t use yet.

Why nobody chases it

Debtors are easy to see. They sit on the aged receivables report, someone chases them, and most owners know roughly what they’re owed.

Unbilled work doesn’t show up like that. Until there’s an invoice, most bookkeeping systems, Xero included, don’t record a sale, so the work lives in timesheets and project trackers. It tends to appear once a year, when the year-end accounts include it as accrued income or work in progress. Month to month, most owners never see a figure for it.

So you can chase every invoice on time and still find cash tight, because 40% of the money you’ve earned hasn’t been invoiced yet.

Working out your own number

Bringing the days down

Most of the fixes are about when you bill, and the easiest time to agree them is before the work starts.

• Bill monthly on longer jobs. Invoice at each month end for what’s been delivered, whatever stage the project has reached.
• Use stages on fixed fees. Invoice part of the fee on signing and spread the rest across points in the job the client can see.
• Ask for a deposit on new work. Even 20% upfront changes the shape of a long project.
• Put unbilled work in the monthly numbers. One line in the management accounts showing unbilled days next to debtor days, so it gets looked at every month.

In the example, cutting unbilled work from 30 days to 10 brings in about £131,500 (20 × £6,575). Sales don’t change and neither does profit. It only happens once, and after that the business runs with £131,500 less tied up in work nobody has invoiced.

There is a cost. Clients who have always paid at the end will notice the change, and some will push back. It’s usually easier to start with new clients and new jobs, and move existing ones over when their work is next priced.

This matters most where work is sold by the project or by the day. We’ve written more about finance for consultancies and professional services firms.

The number to look at this month

The first time, you’ll probably have to add it up by hand. If you listed every job that’s done and not invoiced at the end of this month, what would the number be?