Separating Commissioned Sections From an Old WIP Project Balance
Review partially completed projects by identifiable sections, linking operational handover evidence to cost records without clearing unexplained WIP.
How do you investigate a WIP balance when part of the project is already operating?
Break the project into identifiable sections and map each section to its technical status, handover evidence and attributable costs. Ask engineering and finance to review the same schedule. Leave unsupported allocations and unfinished sections visible rather than moving the whole project balance simply because one part is in use.
A project ledger may show one ageing work-in-progress balance while operations already use a completed building wing or a commissioned pump. The project is neither wholly unfinished nor fully closed. The reconciliation task is to establish which parts are in what state and which costs relate to them, giving finance a defensible basis for its accounting assessment.
Create a section-level status schedule
Ask the technical project lead to identify the sections that can be described and evidenced separately. Use drawing references, location identifiers or equipment serials where appropriate. Capture the dates and scope of inspections, handovers and operational use, along with incomplete work and outstanding conditions. A general statement that the project is ninety per cent complete is not a substitute for this detail.
Distinguish physical progress from formal project administration. A section may be operating while contractual close-out documents remain outstanding, or a completion certificate may cover works that have not been handed to the intended operator. Record both facts without forcing them into a single status that conceals the difference.
Connect costs to the sections
Trace payment certificates, supplier lines, variation references and existing cost codes to the section schedule. Identify costs directly attributable to a section and costs shared across the project. Keep the original ledger amounts visible so the schedule can be reconciled back to the project total after any proposed allocation.
Where allocation is needed, ask finance and the technical team to agree a supported method and document its limitations. Do not divide costs using a convenient completion percentage unless the basis has been assessed. Retain an unresolved-cost column for items that cannot yet be linked. Clearing uncertainty from a spreadsheet does not resolve uncertainty in the project.
Submit a joint decision pack
Prepare a compact pack showing each section, status evidence, cost mapping, proposed treatment and unanswered questions. Finance determines recognition and subsequent accounting under the applicable framework; technical staff explain the state and intended use of the works. Record who reviewed each part and which further evidence is required.
After approved entries are processed, reconcile the remaining WIP to the unfinished or unresolved scope. Retain links between the project, new asset records and the supporting schedule. Set follow-up dates for residual balances, especially retention-related or disputed amounts, so a partially resolved project does not return next year as an unexplained old total.
Practical Example
Illustrative example: a water project contains two pump installations. The first has documented handover and is operating; the second awaits electrical work. Supplier records identify most costs by installation, while a shared engineering fee needs review. The team produces a section schedule with the shared fee clearly marked for allocation assessment. Finance evaluates the completed section separately, and the remaining project balance stays linked to the unfinished installation and unresolved cost treatment.
Action Checklist
- 1.Identify distinct project sections using technical references that operations can recognise.
- 2.Capture handover, inspection and operating evidence separately from percentage completion.
- 3.Map costs directly where possible and disclose shared amounts needing review.
- 4.Obtain coordinated technical and finance review before changing the WIP balance.
- 5.Reconcile the residual balance to named unfinished sections and outstanding questions.
For help tracing partially completed project balances, explore Fixed Asset Register Reconciliation.