Lock-up is the money your practice has earned but not yet collected: work in progress you haven't billed, plus fees you've billed and not been paid. It's usually quoted in days of fee income. NatWest's 2024 survey of accountancy firms put the median at 105 days, so a figure below that and falling is a reasonable sign, as long as you measure it the same way every month.
In this article
The short version
- Lock-up is unbilled work in progress plus fees billed and not yet paid.
- Lock-up days = (WIP + debtors) ÷ annual fee income × 365.
- NatWest's 2024 survey of accountancy firms found a median of 105 days.
- Good means a consistent definition, both halves reported separately and a monthly trend.
- Write-offs, quiet months and switching to billing in advance can all lower the figure.
What lock-up measures
Think about the time between finishing a job and the fee for it reaching your bank. Part of that wait is yours: the work's done and nobody has raised the fee note yet. The rest is your client's: they have the fee note and haven't paid it. Lock-up adds the two together and shows how much of your own money is tied up while you wait.
That's why practice owners tend to use lock-up instead of debtor days. Debtor days only starts counting when you bill, so a practice that collects promptly but has a three-week billing backlog looks tidy on debtor days while carrying a lot of cash it can't spend.
Lock-up has two halves, and they respond to different things:
- Work in progress (WIP) is time and costs recorded against jobs you haven't billed. It moves when your billing routine moves.
- Debtors are fee notes issued and not yet paid. They move when your collection arrangements move.
Some practices also include disbursements they've paid for clients and not yet recharged. Either way is fine, as long as you decide once and stick with it.
It's also worth knowing what the figure leaves out. Work you've quoted for but not started isn't in it, because no time has been recorded. Fees collected in advance aren't in it either, because the money has already arrived. And a fee you write off drops out of the figure on the day you process it, whether or not you ever see the cash.
How to calculate it
The usual calculation is:
Lock-up days = (WIP + trade debtors) ÷ annual fee income × 365
Some practices quote the same fraction without the 365, as a percentage of annual fees. Neither is wrong, but they sound very different, so always say which one you're using.
Say your practice bills £600,000 a year, with £45,000 of unbilled WIP and £75,000 of unpaid fee notes. You're carrying £120,000. That's 20% of a year's fees, or 73 days of fee income. It's the same money in two units, and a partner who hears "20%" may react quite differently from one who hears "73 days".
Splitting it helps too. In that example, WIP is about 27 days (£45,000 ÷ £600,000 × 365) and debtors about 46 days, so most of the waiting happens after the fee note goes out.
What good looks like
The most useful published figure for UK practices comes from NatWest, which surveys accountancy firms every two years. Its 2024 survey of 23 firms found median total lock-up of 105 days, down from 114 in the previous survey. Smaller firms in the survey had a median of 26 WIP days and 66 debtor days, so for them the collection half was the bigger problem. It's a small sample from one bank, so treat it as a rough reference point, not a standard.
Beyond the comparison, a lock-up figure is worth having when it has four qualities:
- It's reproducible. Anyone in the practice, given your written definition and the same reports, gets the same answer.
- It's split. You report WIP and debtors separately as well as combined, because a combined figure hides which half is moving.
- It's a series. One reading tells you little. Twelve readings taken on the same day of the month, from the same report, show you the direction and roughly how fast it's changing.
- It has context. Your fee income for the period sits beside it, with a note of anything unusual or written off.
If the debtors half is the larger one, the fix usually starts at engagement, with an agreed way of paying. Adfin can collect fees by direct debit from a mandate the client signs when they take you on, chase anything unpaid over email, SMS or WhatsApp through its AI Customer Agents, and match each payment back to the fee note in Xero or QuickBooks.
When a falling figure isn't good news
Lock-up can improve for reasons you wouldn't choose, so it's worth checking the cause before you take the credit.
Writing work off removes it from WIP straight away. The figure improves in the same month you lose the fee.
A quiet quarter can lower lock-up without anything changing in how you bill or collect, and a busy one can raise it while everything you've changed is working.
Moving clients to monthly fees billed in advance lowers lock-up because you're collecting before the work creates any WIP. That's a real improvement in cash, but it means your figure isn't comparable with your own history from before the change, or with a practice that bills on completion.
Timing matters in a small practice, too. One large fee note raised on the last day of the month can move your figure further than a quarter of genuine improvement. Reading the trend three months at a time smooths most of that out.
Common questions
What does lock-up include in an accountancy practice? Unbilled work in progress plus fees billed but not yet collected. Whether you include unbilled disbursements is your choice, as long as you're consistent.
Is lock-up the same as work in progress? No. WIP is one half of it. Lock-up adds your unpaid fee notes, so it covers the whole wait from finishing the work to being paid.
What is the average lock-up for a UK accountancy practice? NatWest's 2024 survey of 23 accountancy firms found a median of 105 days. Smaller firms had a median of 26 WIP days and 66 debtor days.
How do you calculate lock-up days? Add WIP and trade debtors, divide by annual fee income and multiply by 365. Without the 365, the same fraction gives lock-up as a percentage of fees.
How often should a practice measure lock-up? Monthly, on the same day and from the same report, with fee income for the period beside it. Read the trend over a few months rather than one reading.
Does billing monthly in advance reduce lock-up? Yes, because you're paid before the work creates WIP. It changes the basis of the figure, so compare your numbers before and after the switch with care.
Sources
- NatWest - The accountancy trends shaping 2024 (accurate as of October 2026) https://www.natwest.com/business/insights/sector-trends/professional-and-business-services/the-accountancy-trends-shaping-2024.html
- British Business Bank - Why working capital is important to your business (accurate as of October 2026) https://www.british-business-bank.co.uk/business-guidance/guidance-articles/finance/why-working-capital-is-important-to-your-business
- Adfin - Direct debit payments (accurate as of October 2026) https://www.adfin.com/direct-debit-payments
- Adfin - Credit control (accurate as of October 2026) https://www.adfin.com/credit-control
