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Understanding Unrecognized Time and Expenses in Invoices
Understanding Unrecognized Time and Expenses in Invoices
Updated over a week ago

When creating an invoice in Productive, you might encounter negative (Unrecognized) line items.

Understanding how unrecognized time and expenses are handled in invoicing ensures accurate billing and transparency for both you and your clients.

By following these steps, you can navigate through such scenarios effectively and maintain clarity in your invoicing process.

The Budget Scenario

Let's consider a scenario where a service, let's say "Development," is billed with a Fixed billing type, and 10 hours are budgeted for it. However, the team ends up tracking 12 hours against this service.

Creating the Invoice

When you choose Uninvoiced Time and Expenses as the invoicing method for this service, the invoice will display the following line items:

  • 12 hours for Development

  • -2 hours for Development (Unrecognized)

The negative line item represents the extra hours tracked beyond the budgeted amount. In this case, since 12 hours were tracked but only 10 were budgeted, the system automatically adds a line item for the 2 extra hours as "Unrecognized".

Billing Logic

In scenarios where a fixed service is billed, the invoiced amount will match the budgeted hours, regardless of the actual hours tracked.

Any excess tracked hours are treated as unrecognized and are subtracted from the total billed amount.

Manually Adjusting the Amount in the Invoice

Before finalizing the invoice, you have the option to disregard the unrecognized (negative) value automatically added and calculated by Productive.

However, proceed with caution. Deleting such line items will lead to over-invoicing the budget, which could result in discrepancies and potential issues with your client.

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