How Underbilling Skews Project Financials
When a contractor underbills, they are effectively postponing the receipt of revenue, which can lead to cash flow shortages. Underbilling also gives a false impression of the project’s financial status, as the contractor’s accounts may not reflect the actual work progress. This can result in financial strain if unbilled costs accumulate over time.Best Practices for Avoiding Underbilling
Contractors should regularly reconcile invoices with the project’s progress reports to ensure that they bill accurately for the work completed. Implementing project management software can help track billable milestones and prevent revenue delays.Related Terms: Invoice Reconciliation