Managing WIP for Fixed Fee Jobs Invoiced via Xero

When fixed fee invoices are raised using recurring invoices in Xero, while time continues to be tracked in Xero Practice Manager (XPM), Work In Progress (WIP) will appear as unbilled within XPM. This is expected behaviour, as the billing is occurring outside of XPM.

To ensure WIP does not accumulate and reporting remains accurate, it is important to align invoice imports with job data and regularly review and clear WIP.

It is essential that the correct XPM settings are configured for the Xero integration to allow invoices raised in Xero to flow into XPM.

For guidance, refer to:

Invoices imported from Xero will appear in XPM and can be used for KPI and WIP reporting purposes.

Repeating invoices created in Xero should include the XPM Job Number in the Reference field.

This ensures that when the invoice is raised, it is automatically imported into XPM and allocated to the correct job where time is being recorded.

If the reference field is left blank, the invoice will still import but will be allocated at the client level rather than the job. This prevents the invoice from offsetting WIP correctly.

Within each job in XPM, the Financial tab provides visibility over both Work In Progress and any invoices imported from Xero. The net difference between these values represents either a write-on or a write-off.

This data should always be reviewed in the context of the firm’s pricing and delivery model. For fixed fee work, it is generally expected that invoiced amounts exceed the internal cost reflected in time entries.

Although invoices are raised externally, time should still be recorded as billable, as it reflects the true value of work performed and supports accurate KPI reporting.

Once WIP has been reviewed, it can be cleared by selecting “Remove from Invoice List” within the job.

This action offsets the recorded WIP against the imported invoices, preventing WIP from continuing to build and ensuring job profitability reporting remains accurate.

It is recommended that WIP on fixed fee jobs is reviewed and cleared on a regular basis. A quarterly review cycle is commonly effective, as it provides a meaningful view of work completed versus fees invoiced over a three-month period.

When using Xero for invoicing and XPM for time tracking, WIP will naturally appear as unbilled unless it is matched against imported invoices.

Ensuring invoices include the correct job reference, regularly reviewing job financials, and clearing WIP appropriately will maintain accurate reporting and reliable KPI insights.