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    « How many accounting periods does an inventory error affect? | Main | What is an inventory reserve? »
    Wednesday
    Feb022011

    What is the difference between 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 you should generally not have trouble interchanging 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 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 consulting projects and construction projects. 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.

    Related Topics

    How do I estimate ending inventory?
    What is beginning inventory?
    What is inventory?
    What is the cost to store inventory?
    What is the ending work in process formula?

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