What is Work in Process?

Work-in-process refers to materials that have been partially completed through the production process. These items are typically located in the production area, though they could also be held to one side in a buffer storage area.

What is Work in Progress?

Work in progress refers to partially-completed goods that are still in the production process. These items may currently be undergoing transformation in the production process, or they may be waiting in queue in front of a production workstation. It tends to refer to processes that require a significant amount of time to complete.

Comparing Work in Process and Work in Progress

Many business dictionaries state that there is no difference between the terms work in process and work in progress, so it is possible to interchange the terms. However, there is a difference based on the common usage of the terms process and progress. "Process" implies that there is a manufacturing process in place where products are created under a standardized and ongoing production system. Thus, work in process applies more readily to a manufacturing environment.

The word "progress" implies a longer-term period during which a product is completed, possibly covering a number of accounting periods. Given the implied duration, this means that work in progress more readily applies to longer-term consulting projects and customized product work. In both cases, there is no highly engineered process in place for arriving at a final product, as would be the case in a manufacturing environment.

In short, there are differences in how you can use the terms work in process and work in progress - however, these are fine distinctions, so you should be able to use either term in most cases.

Accounting Applications

Within the accounting field, both work in process and work in progress are used interchangeably to refer to unfinished production. These assets may include a mix of raw materials, direct labor, and factory overhead. The accumulated amounts of these assets will appear within the inventory line item on a reporting entity’s balance sheet, and will be classified as a current asset. As a best practice, some organizations will complete all in-progress work prior to the end of a reporting period, so that they do not have to account for it as part of their month-end closing activities.

The Construction-in-Progress Account

These in-progress concepts do not apply to construction projects, for which there is a separate construction-in-progress account that accumulates costs. Once a construction project has been completed, the balance in this account is shifted into a fixed assets building account and then depreciated. For a large construction project, accountants typically issue periodic reports that show the status of each in-progress project, including any projected profits and losses.