Define: Unbilled Revenue
Unbilled Revenue refers to the value of products delivered or services performed under a contract for which an invoice has not yet been issued. It is recognized as earned income because the obligation has been fulfilled, but payment terms, milestones, or invoicing schedules mean the formal bill and cash collection happen later.
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What Unbilled Revenue Means in a Contract
Unbilled Revenue describes the gap between performance and invoicing. When a supplier delivers goods, completes a service milestone, or provides ongoing access under a subscription, value has been created and, under many accounting frameworks, revenue can be recognized. However, the contract's invoicing schedule, such as monthly billing cycles, milestone completion sign-off, or end-of-term reconciliation, may not trigger an invoice until later. During that interval, the amount owed is unbilled but earned.
Contracts rarely use the term.
Relevant Circumstances
- Supply of goods and services before invoicing takes place
- Trade relationships with extended payment terms
- Long-term projects where costs accrue over time