The WIP report: the one schedule that tells you if you're ahead or behind

Work in progress is the value of work completed but not yet billed. The WIP schedule turns percent-complete math into a per-job answer: overbilled or underbilled, and by how much.

Every contractor has felt the question a WIP report answers: are we billing ahead of the work, or working ahead of the billing? Work in progress is the value of work completed on a job that hasn't yet been billed to the client — and the WIP schedule runs that calculation on every open job and gathers it into one report.

Three lines of arithmetic

The standard method is percentage of completion, recognized under US GAAP (ASC 606) and IFRS 15:

• Percent complete = costs incurred to date ÷ total estimated costs.
• Earned revenue = percent complete × total contract value.
• Over/under billing = total billings to date − earned revenue.

A positive result means you're overbilled — you've invoiced more than you've earned, which shows as a liability. A negative result means you're underbilled: you've earned revenue you haven't invoiced, which shows as an asset and, practically speaking, means you're financing the job from your own working capital.

The math is easy; the inputs are where honesty lives

The two inputs decide everything: cost to date, and cost to complete. Stale cost-to-complete estimates — copying last quarter's number forward — are the classic way a WIP schedule starts lying. Sureties read the report for exactly that: underwriters weigh it heavily because construction revenue only means something next to the cost of finishing the work, and a contractor who produces a clean WIP schedule monthly, unprompted, earns better bonding capacity than one who scrambles quarterly.

WIP is a management tool, not an accounting ritual

Run per job and per month, the WIP schedule flags the job that finished 40% of the work after spending 50% of the budget while there's still time to act. It is the financial twin of the schedule of values and the reality check behind budget vs. actual tracking — all of it computed from the same job costs. That per-job, per-month visibility is what an ERP for construction companies runs for a contractor, implemented around the way each company works.