What a WIP report is
A work-in-progress (WIP) report lists every open job with its contract value, estimated total cost, cost to date, billings to date and percent complete. It answers one question your profit-and-loss statement cannot: on the jobs you are still building, have you billed ahead of the work or behind it?
Banks and sureties ask for it because a contractor's P&L can look healthy while open jobs quietly lose money.
The columns that matter
Most WIP schedules share the same core columns:
- Contract value, including approved change orders
- Estimated total cost at completion
- Cost to date from the job cost ledger
- Percent complete (cost to date ÷ estimated total cost)
- Earned revenue (contract value × percent complete)
- Billed to date and the resulting over- or under-billing
Over-billing vs under-billing
Over-billing means you have invoiced more than you have earned. It brings cash in early, but that cash is owed back in work, so it is a liability, not profit.
Under-billing means you have done work you have not yet invoiced. It can signal slow billing, unapproved change orders, or a job whose costs are running over the estimate. Persistent under-billings are one of the first things a lender questions.
Why it changes your profit picture
If you report revenue only as you invoice, heavy over-billing makes the year look more profitable than it is, and under-billing hides profit you have earned. Adjusting for both gives a truer picture of margin on work in progress.
The estimate to complete is the weak point. If project managers do not update estimated costs, percent complete — and every number after it — is wrong.
Reading one in five minutes
- Sort by under-billings first and ask why each one exists
- Compare current gross margin on each job to the bid margin
- Look for jobs where margin dropped from last month (fade)
- Check that total over-billings are not funding day-to-day operations
When to get help
If your numbers raise more questions than they answer, a short outside review usually shows where the gaps are and which fix matters first. A 20-minute financial review looks at where your books, job reporting and cash visibility stand today — no pressure, and no commitment to an engagement.
Want this reviewed against your actual numbers?