Year‑End Billing & Receivables: Clean Up WIP, Accelerate Cash Flow & Close Out the Year Smartly
For many advisory firms, the year-end is less about fireworks and more about finish-lines; especially when it comes to billing, receivables and work-in-progress (WIP). If these areas are messy, you risk blurred profitability, client dissatisfaction or delayed growth. Clean them up now.
Here’s how your practice can lock in revenue, accelerate cash flow and close the operational chapter on a strong note.
1. Audit outstanding invoices and billing cycles
Start by running a report of all invoices issued, unpaid, partially paid or overdue. Sort by age and client tier. Ask: Which clients are overdue by more than 30/60/90 days? Are any invoices disputed? Rectify discrepancies before December closes.
A clean receivables ledger reduces surprise write-offs and clarifies income for next year’s planning.
2. Clear out work-in-progress (WIP) and define cutoff dates
WIP refers to services rendered but not yet billed. These can quietly erode margin if not managed. Establish a cutoff date (e.g., December 20) after which work is deferred into the next fiscal year. Document the amount of WIP, invoice it promptly or schedule it for the follow-up year.
3. Review your fee structure and recognize revenue appropriately
Does your current billing model tie appropriately to services delivered? If you operate retainer or project-fee models, confirm you’ve captured everything owed. For AUM-based fees, check that asset statements are complete, and custody reconciled. Accurate revenue recognition is essential for year-end financial health.
4. Communicate with clients proactively
Send reminder notices, especially for large or strategic clients, politely flagging any pending items they need to sign or pay. Frame this as part of your firm’s careful year-end housekeeping, which underscores professionalism and service quality, not just debt-collection.
5. Use the year-end cleanup as a business-planning trigger
Once receivables and WIP are cleared, you’ll have a more accurate picture of the firm’s true service capacity, cash-flow picture and profitability heading into next year. Use this clarity to inform your budgeting, staffing and investment decisions for 2026.
Conclusion
Year-end billing and receivables clean-up isn’t glamorous, but it’s operationally essential. A firm that locks in revenue today is positioned to launch next year with momentum.
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