Unbilled Revenue and Contract-Asset Reconciliation in the UAE

Unbilled revenue can be commercially valid while still becoming a control risk. For UAE project and professional-services businesses, the month-end reconciliation should explain why revenue has been recognised before an invoice, when billing will occur and what evidence supports the amount.

Start with the contract and performance obligations

Create a contract register that identifies the customer, signed agreement, amendments, scope, consideration, performance obligations, billing terms and responsible project owner. IFRS 15 sets a five-step model and requires revenue to be recognised when or as a performance obligation is satisfied. Finance should not create a contract asset simply because a project team expects to bill later.

Connect progress evidence to the revenue calculation

Where performance is satisfied over time, document the approved measure of progress and apply it consistently. Evidence may include accepted milestones, approved timesheets, delivery records, customer confirmations or controlled cost-to-complete estimates. Reconcile operational evidence to the calculation and record changes in estimates with reviewer approval.

Build a contract-asset roll-forward

For every balance, show the opening amount, current-period revenue recognised, invoices raised, adjustments, write-offs, transfers and closing amount. Reconcile the total to the general ledger and investigate manual journals. Keep contract assets distinct from trade receivables because the remaining right to consideration is still conditional on something other than the passage of time.

Match billing milestones and subsequent invoices

Map each unbilled amount to the next contractual billing event, expected invoice date and owner. After month-end, match invoices back to the opening reconciliation. A balance that does not convert as expected may indicate missing customer acceptance, a disputed deliverable, incomplete project administration or an error in the revenue estimate.

Age and challenge unresolved items

Age balances from the date they arose, not only from the expected billing date. Apply escalation thresholds for old, large or repeatedly rolled-forward items. Ask whether the obligation was actually satisfied, whether enforceable rights exist, whether the estimate remains supportable and whether collectability or contract modification issues need separate review.

Separate accounting from billing performance

A strong report shows both accounting support and operational billing status. Use reason codes such as milestone pending, customer certification pending, invoice preparation delay, contract amendment, disputed scope or estimate revision. This allows management to distinguish genuine contract timing from revenue leakage and cash-conversion problems.

Month-end checklist

1. Reconcile the contract register to active projects. 2. Confirm signed terms and amendments. 3. Validate the performance obligation and progress evidence. 4. Roll forward contract assets to the ledger. 5. Map each balance to a billing milestone and owner. 6. Match subsequent invoices and investigate exceptions. 7. Age unresolved balances and approve estimate changes.

This guide supports finance control design. Revenue recognition conclusions depend on the contract, performance obligations and applicable reporting requirements.

About the author

Haris Arif is Head of Finance and Investment. He is a finance and investment leader with experience across multi-entity businesses in technology, F&B and hospitality. He writes practical insights on financial control, management reporting, working capital, tax readiness and finance transformation for UAE founders, CFOs, investors and management teams.

Connect with Haris Arif on LinkedIn: https://www.linkedin.com/in/harisarifofficial/