Unbilled Receivables / Unbilled Revenue Journal Entry - Definition And Meaning

What Is Unbilled Revenue In Accounting / Unbilled Revenue Adjusting Entry / Is Unbilled Revenue A Receivable?

Unbilled Revenue means that the company earned the revenue (e.g., fees earned) for the goods sold or services rendered to clients but still the bill is not invoiced to clients for the period. It is a Revenue Receivable from clients / customers against the goods sold or services rendered to them.

Example

If a company completed a project for a client on 5^th September, 2020, but the bill is invoiced to him on 10^th September, 2020, then from 6^th September to 9^th September, the company records unbilled revenue for the services delivered / rendered to client.

Unbilled Accounts Lists / Examples

Unbilled Fees, Unbilled Legal fees, Unbilled Accounting Fees, etc.

There are two possible journal entries to record for unbilled revenue, which are shown below:

 

1. When the Bill is not invoiced to Clients / Customers

Unbilled Receivables Journal Entry

                            Unbilled Revenue / Unbilled Accounts Receivable a/c  XXX

  

                                                                                                                      Revenue a/c / Sales a/c  XXX

 

                                                    (Revenue Earned But Billed Not Invoice To Client)

 

2. When The Bill Is Invoiced / Issued To Clients Or Customers

At this time, we debit Accounts Receivable Account and credit Unbilled Accounts Receivable Account in order to close unbilled revenue account or unbilled accounts receivable account as shown below:

                        Accounts Receivable a/c  XXX

 

                                                                 Unbilled Revnue a/c / Unbilled Accounts Receivable a/c  XXX

 

                                                        (To Close Unbilled Accounts Receivable)

 

Accounting Treatment

Unbilled Revenue is a Current Asset and shown on balance sheet i.e., on assets side.

 

Unbilled Revenue is also known as Accrued Revenue and Unbilled Accounts Receivable in Accounting.