Billed, received, delivered: three numbers, not one
A project can be 80% billed, 50% delivered and 40% paid at once. Why the three numbers differ, which one is revenue, and what each gap between them tells you.
For anyone running projects that are invoiced in stages · 3 min read · updated
In short
- Billed, delivered and received measure different things and legitimately diverge.
- Billed ahead of delivered is a liability — a contract liability under Ind AS 115 — not income.
- Delivered ahead of billed is unbilled revenue: an asset, and a common cause of cash shortfalls.
- Revenue follows delivery; service income is recognised as the work is performed.
- Measure delivery against milestones that can be evidenced, not hours spent.
One project, three percentages
Take a ₹10 lakh fit-out job. You have invoiced ₹8 lakh, the work is about half done, and the customer has paid ₹4 lakh. Ask how far along the project is and there are three honest answers: 80%, 50% and 40%.
They measure different things. Billed is what you have asked for, delivered is what you have done, and received is what is in the bank. All three are real and they diverge for good reasons — a business that watches only one is deciding on a number that answers a different question.
What each gap means
Compare any two of the three and the difference has a specific meaning:
- Billed ahead of delivered: you have invoiced for work not yet done. That is owed back in work, and in the accounts it is a liability — Ind AS 115 calls it a contract liability — not income.
- Delivered ahead of billed: you have done work you have not invoiced. It is an asset, usually shown as unbilled revenue, and the commonest reason a profitable project runs short of cash.
- Billed ahead of received: the customer owes you. An ordinary receivable, and its age is what to watch.
- Received ahead of delivered: an advance. Good for cash, but still work you owe.
Which one is revenue
Revenue follows delivery — not the invoice and not the cash. Under both Ind AS 115 and the older AS 9, income from a service is recognised as the work is performed, which for a project running over months means broadly in proportion to how complete it is.
In the example, revenue is about ₹5 lakh, not the ₹8 lakh invoiced or the ₹4 lakh received. The extra ₹3 lakh billed has not been earned yet. Reporting it as income flatters this month and hollows out the next, when the work catches up and there is nothing left to bill.
Why conflating them hurts
Treat billed as delivered and you believe you have been paid for unfinished work; the moment a customer disputes the final stage, money you had counted is suddenly contested.
Treat received as delivered and a slow payer looks like a slow project, so you chase the team instead of the invoice.
Treat delivered as billed and a project can be profitable on paper while the business runs out of cash, because nobody noticed three stages of finished work that were never invoiced.
Measuring delivered honestly
Delivered is the hard one, because it is the only one of the three not recorded automatically by an invoice or a payment. Tie it to milestones that can be evidenced — a signed-off design, a finished floor, an accepted module — rather than hours spent, which measure effort rather than progress.
Then put all three side by side, every week, for every live project. The gaps between them are the report. A project where all three agree is either finished or not being managed.
Common questions
- Is money received in advance counted as revenue?
- No. An advance is a liability until the work it pays for is done. It becomes revenue as you deliver, whatever date the money arrived.
- What is unbilled revenue?
- Work you have completed and earned but not yet invoiced. It sits on the balance sheet as an asset, and a large unbilled balance usually means invoicing is lagging behind the work.
- How should a small business measure project completion?
- By milestones that can be evidenced and agreed with the customer, such as a signed-off stage or a handover, rather than by hours. Hours tell you what the project cost; milestones tell you how far it has got.