Table of Content
What is a construction WIP report?
A construction WIP (work in progress) report is a schedule of every open job that shows the contract value, estimated total cost, costs to date, percent complete, revenue earned, amount billed, and whether the job is overbilled or underbilled. Contractors use it to recognize revenue, see cash flow risk and watch margins, and sureties and lenders ask for it. Percent complete is costs to date divided by estimated total cost, and earned revenue is contract value times percent complete.
- A WIP report has one row per open job. The core fields are contract value, estimated total cost, costs to date, percent complete, earned revenue, billed to date, cost to complete and over or under billing.
- The formulas are simple: percent complete = costs to date / estimated total cost; earned revenue = contract value x percent complete; over or under billing = earned revenue minus billed to date; cost to complete = estimated total cost minus costs to date.
- Overbilled jobs mean you have billed more than you have earned, so some of your cash belongs to future costs. Underbilled jobs mean you have earned more than you have billed, and cash is tied up in finished work.
- Our worked example shows how a cost estimate that rises from $800,000 to $880,000 cuts the job’s margin from 20% to 12% and almost doubles the overbilling, which is why estimates need monthly review.
- Automation depends on job costing: code every cost to a job, connect your project and accounting systems, calculate on a schedule, and alert on exceptions. A basic sync between systems may move transactions without producing a WIP schedule.
- Pair the WIP report with a rolling 13-week cash flow forecast to see how today’s billing position becomes cash. CommercePundit builds these integrations. See the last section.
What is a WIP report in construction?
A WIP report, also called a WIP schedule, is the contractor’s view of every job that is started but not finished. For each job it compares what you have earned, based on progress, with what you have billed. The difference tells you whether the customer owes you for work already done or whether you are holding cash for work still to come. Controllers, CFOs and project managers review it, and surety companies and construction lenders request WIP schedules during underwriting.
What fields go in a WIP report?
| Field | What it means | Where it comes from |
|---|---|---|
| Job number and name, project manager | Identifies the job and owner | Job master |
| Contract value | Current contract amount, including approved change orders | Contract and change order log |
| Estimated total cost | Everything you expect the job to cost, including committed costs | Estimate, updated by the project manager |
| Costs to date | Costs posted to the job so far | Job cost ledger |
| Percent complete | Share of the job finished, usually cost to cost | Calculated |
| Earned revenue | Revenue you have earned to date | Calculated |
| Billed to date | Total invoiced to the customer | Billing or accounts receivable |
| Over or under billing | Billed compared with earned | Calculated |
| Cost to complete | Remaining cost to finish | Calculated |
| Estimated and projected gross profit | Contract value minus estimated total cost | Calculated |
| Retainage and committed costs (optional) | Amounts held back, and purchase orders and subcontracts not yet billed | Accounts receivable and purchasing |
What are the WIP report formulas?
| Measure | Formula |
|---|---|
| Percent complete (cost to cost) | Costs to date / estimated total cost |
| Earned revenue | Contract value x percent complete |
| Over or under billing | Earned revenue minus billed to date (positive means underbilled, negative means overbilled) |
| Cost to complete | Estimated total cost minus costs to date |
| Estimated gross profit | Contract value minus estimated total cost |
| Profit to date | Estimated gross profit x percent complete |
What does a WIP report look like? A worked example
The numbers below are our own illustration, not a client job. A contractor has a $1,000,000 contract, estimates total costs at $800,000, has spent $400,000 and has billed $550,000.
| Line | Calculation | Result |
|---|---|---|
| Percent complete | $400,000 / $800,000 | 50.0% |
| Earned revenue | $1,000,000 x 50.0% | $500,000 |
| Over or under billing | $500,000 – $550,000 | $50,000 overbilled |
| Cost to complete | $800,000 – $400,000 | $400,000 |
| Estimated gross profit | $1,000,000 – $800,000 | $200,000 (20%) |
| Profit to date | $200,000 x 50.0% | $100,000 |
Now the project manager raises the estimate to $880,000 because of material costs, with the same $400,000 spent and $550,000 billed:
| Line | Calculation | Result |
|---|---|---|
| Percent complete | $400,000 / $880,000 | 45.5% |
| Earned revenue | $1,000,000 x 45.5% | $454,545 |
| Over or under billing | $454,545 – $550,000 | $95,455 overbilled |
| Estimated gross profit | $1,000,000 – $880,000 | $120,000 (12%) |
| Profit to date | $120,000 x 45.5% | $54,545 |
One revised estimate cut the margin from 20% to 12%, reduced earned revenue by $45,455 and almost doubled the overbilling. This is why the estimated total cost is the most important number on the page, and why leaving approved change orders or committed costs out of it gives a false picture.
What do overbilling and underbilling mean?
Overbilling means billings are ahead of earned revenue. It reads well for cash, but it is a liability: the cash covers costs you have not yet incurred. On the balance sheet, overbillings appear as a current liability, traditionally labeled billings in excess of costs and estimated earnings, and under the ASC 606 revenue standard as a contract liability. Underbilling means you have earned more than you have billed, a contract asset, and it ties up cash in work already performed. A pattern of underbilling across jobs is a warning sign for lenders and sureties, as is margin fade, where the estimated profit keeps shrinking as cost estimates rise. Totals on the schedule should reconcile to your financial statements. Check the formal rules in ASC 606 or with your CPA.
How often should you update a WIP report?
At least monthly, ideally when you close each billing cycle. Contractors with bonding requirements or fast growth often run it weekly. The common mistakes are using budget spent as a proxy for percent complete, leaving approved change orders out of contract value, running it only at month end, letting project managers and accounting work from different numbers, and leaving committed costs out of the estimate.
How does a WIP report connect to a 13-week cash flow forecast?
The WIP report tells you where each job stands against its billings. A 13 week cash flow forecast (also written with a hyphen) turns that into dates. It is a rolling, week-by-week projection of actual cash in and out for the next quarter, built from bank-level cash movements rather than accrual accounting. Each week starts with the beginning cash balance, adds expected receipts based on the receivables aging, subtracts disbursements timed to when they will clear, and carries the ending cash to the next week. The forecast rolls weekly: the oldest week drops off, a new thirteenth week is added, and last week’s forecast is compared with actual results. For a contractor, an overbilled job means cash arrives early and is spent later, and an underbilled job means a billing to send now. Our cash flow forecasting guide shows the automation behind this, and accounts receivable automation covers collections.
How do construction companies automate job cost reporting?
- Code every cost to a job and cost code as it happens: labor hours, receipts, subcontractor invoices and purchase orders.
- Connect field and office systems. Project management tools and accounting software often sync at the transaction level, which moves costs but may not produce a WIP schedule, so check that your setup calculates one.
- Calculate on a schedule. Let the accounting system or ERP compute percent complete, earned revenue and over or under billing from job cost and billing data rather than a spreadsheet someone updates.
- Include committed costs from purchase orders and subcontracts in the estimate to complete.
- Alert on exceptions, such as a margin that drops below a threshold, a job that is underbilled, or a cost code over budget.
- Show it on a dashboard that project managers and finance both read, so there is one set of numbers.
Automation only works if the inputs are clean, so reconcile job costs to the ledger before you trust the output. Sage Intacct Construction is one product that offers an open API for connecting construction and operational software; confirm the integration produces a true WIP output before you buy. Our guides to invoice processing automation, payment reconciliation and the purchase order process cover the upstream steps that feed job cost.
What does WIP stand for?
WIP stands for work in progress. In manufacturing it means partly finished goods in inventory, in professional services it can mean unbilled time, and in construction it means open jobs measured against billings. This guide covers the construction meaning.
Which systems can produce a WIP report?
Construction accounting software and ERP systems calculate WIP from job cost data, and many contractors still build it in a spreadsheet from exported job costs. The right setup depends on how many jobs you run and how often you report. If your tools do not connect, an integration project is usually cheaper than re-keying data. See our AI agents in ERP and ERP implementation guides for the planning side, and our financial dashboard examples for the reporting side.
If you want a team to connect your job cost, billing and reporting, see our AI integration services, business intelligence dashboard services and AI automation.
Frequently Asked Questions
What is a WIP report in construction?
It is a schedule of open jobs showing contract value, estimated cost, costs to date, percent complete, earned revenue, billings and whether each job is overbilled or underbilled. Contractors, sureties and lenders use it.
How is WIP calculated in construction?
Percent complete is costs to date divided by estimated total cost. Earned revenue is contract value times percent complete. Over or under billing is earned revenue minus billed to date.
What does a WIP report look like?
It is a table with one row per job and columns for contract value, estimated cost, costs to date, percent complete, earned revenue, billed to date, over or under billing and cost to complete, with totals at the bottom.
What is overbilling and underbilling?
Overbilling means billed exceeds earned revenue and is a contract liability. Underbilling means earned revenue exceeds billed and is a contract asset.
How often should a WIP report be updated?
At least monthly, ideally at each billing cycle close. Contractors with bonding needs or fast growth often run it weekly.
Who asks for a WIP report?
Surety companies and construction lenders request it during underwriting, and controllers, CFOs and project managers review it internally.
What is a 13-week cash flow forecast?
A rolling, week-by-week projection of cash in and out for the next quarter, built from bank-level cash movements. It rolls forward weekly and is compared with actual results.
How do construction companies automate job cost reporting?
They code every cost to a job, connect field and accounting systems, calculate percent complete and over or under billing on a schedule, include committed costs, and alert on margin and billing exceptions.
Can I make a WIP report in Excel?
Yes. Use the field list and formulas in this guide as a WIP report template and build it from exported job costs. The risk is manual updates and version drift, which is why larger contractors calculate it in their accounting system or ERP.
Bottom Line
A construction WIP report is the contractor’s early warning system: it shows earned revenue against billings, margin fade, and the cash position of every open job. Keep the estimated total cost current, include change orders and committed costs, update it at least monthly, and reconcile it to the ledger. Automate the job cost feed so project managers and finance read the same numbers, and pair the report with a rolling cash flow forecast. To connect your job cost, billing and reporting, talk to us about AI integration services.
