What a WIP schedule shows
Also called a WIP report, a WIP schedule gives every open job one row. Each row answers two questions: is this job on track to make what it should, and is your billing keeping up with the work?
Here is what each column means and where its number comes from.
| Column | What it means | Where the number comes from |
|---|---|---|
| Contract price | What the customer owes for the whole job, approved change orders included | The signed contract and each approved change order |
| Estimated total cost | What you now expect the whole job to cost | Your estimate, updated as the job moves |
| Cost to date | What the job has cost so far | Your job cost report, from a closed month |
| Percent complete | How far along the job is, measured by cost | Cost to date ÷ estimated total cost |
| Earned revenue | The revenue the work so far has earned | Contract price × percent complete |
| Billed to date | What you've invoiced so far | Your pay apps or billing log |
| Over (under) billed | How far your billing is ahead of the work, or behind it | Billed to date minus earned revenue |
| Percent complete | $198,400 ÷ $320,000 | 62% |
| Earned revenue | 62% × $400,000 | $248,000 |
| Over (under) billed | $200,000 − $248,000 | ($48,000) |
One idea carries the whole schedule: billing isn't revenue. Revenue is earned as the work gets done, measured here by cost. A pay app is when you ask to be paid, and it can run ahead of the work or behind it.
How to build a WIP schedule, step by step
For each open job you need four things: the contract with its approved change orders, an updated estimate, the job's costs from a closed month, and what you've billed. Then eight steps.
- List every job with activity this period. Include each job with labor, costs or billings this month. Leave out jobs that closed last year and have had no activity since.
- Enter the contract price, with approved change orders. Start from the signed contract and add every approved change order. Unapproved change orders need a closer look before they go in: banks and sureties often take them out until they're agreed in writing.
- Enter the estimated total cost, updated. Use what the job will cost by the end, given what has happened so far, not the original bid. Ask the project manager, and count costs already committed on subcontracts and purchase orders.
- Enter cost to date from the closed books. Take each job's cost to date from a closed month, with every account reconciled. A missing cost, or one posted twice, changes every number after it.
| Step | Column | Warehouse reroof |
|---|---|---|
| 2 | Contract price | $400,000 |
| 3 | Estimated total cost | $320,000 |
| 4 | Cost to date | $198,400 |
| 5 | Percent complete | 62% |
| 6 | Earned revenue | $248,000 |
| 7 | Billed to date | $200,000 |
| 7 | Over (under) billed | ($48,000) |
| 8 | Estimated margin | 20% |
Step 1 put the reroof on the list. Step 8 checks its margin against last month's.
- Work out percent complete. Divide cost to date by estimated total cost. This is the cost-to-cost method: it measures progress by what you've spent against what the whole job will cost.
- Work out earned revenue. Multiply the contract price by percent complete. That's the revenue the work has earned so far, whatever you've billed.
- Work out over or under billing. Subtract earned revenue from billed to date. A positive number means the job is over billed. A negative number means it's under billed.
- Tie it out, then review it. Cross-check the totals against your income statement and balance sheet. Then look for jobs where cost to date has passed the estimate or billing has passed the contract price, for large over or under billings, and for margins that moved since last month.
Steps 5 to 7 are arithmetic, and the free template does them for you. The judgment is in steps 2 to 4. A stale estimate, or a cost posted to the wrong job, flows straight through to the answer.
Cost-to-cost is one of the input methods in FASB's revenue standard, Topic 606: progress measured by costs incurred against the total costs expected (paragraph 606-10-55-20).
A worked example: three sample jobs
Sample, numbers made up
These are the three jobs that come filled in on the template.
| Job | Contract | Est. total cost | Cost to date | % complete | Earned revenue | Billed to date | Over (under) billed | Est. gross profit |
|---|---|---|---|---|---|---|---|---|
| Warehouse reroof | $400,000 | $320,000 | $198,400 | 62% | $248,000 | $200,000 | ($48,000) | $80,000 (20%) |
| Medical office | $600,000 | $500,000 | $425,000 | 85% | $510,000 | $532,000 | $22,000 | $100,000 (16.7%) |
| School addition | $1,000,000 | $850,000 | $340,000 | 40% | $400,000 | $385,000 | ($15,000) | $150,000 (15%) |
Across all three, $63,000 is under billed on two jobs. That's work done and not billed yet, so bill it with the next pay app. And $22,000 is over billed on the medical office: cash you're holding for work you still owe.
Where change orders go
When a change order is approved, add its price to the contract price and its cost to the estimated total cost. Work done on an approved change order that isn't billed yet shows up as under billing on the schedule, the Construction Financial Management Association (CFMA) notes, and so can work on a change order that isn't approved yet.
What one bad entry does
Sample, numbers made up: say an $8,000 supplier bill gets entered twice on the warehouse reroof. Cost to date jumps to $206,400, so percent complete reads 64.5% and earned revenue $258,000. The job now shows $2,000 more profit to date and $10,000 more under billing than is real.
That's the trap. An error that makes a job look better is easy to miss, because nothing about it looks wrong. It's why the schedule should come after a close that reconciles every account.
A payment recorded twice, caught in a roofing client's August close.
From Jordan's client work before Peacock Accounting & Finance. The client is unnamed.Double entries happen in real books too, like the payment recorded twice that Jordan caught in a roofing client's close.
Over and under billing on a WIP report, in cash terms
Over billing means you've billed more than the work so far has earned: cash in hand for work you still owe. Under billing means the work so far has earned more than you've billed: work done that you haven't been paid for yet.
Over billed: cash you've collected for work you still owe
The medical office in the sample is $22,000 over billed. The cash is in your account, but the work it paid for hasn't happened yet.
CFMA warns project managers not to count on over billing as profit. Treat that cash as yours and spend it on something else, which CFMA calls job-borrow, and the job can run short of cash before it's finished.
Under billed: work you've done and haven't billed
The sample reroof is $48,000 under billed. Its labor, materials and subs are already in your books, paid or owed, and the customer hasn't been billed for them yet. Bill it with the next pay app.
Under billing that keeps growing month after month is worth a look. Two places to check first: change orders that aren't billed or approved yet, and costs posted to the wrong job, like the double entry above.
Where over and under billing sit on the balance sheet
| Contract assets (under billings) | $63,000 |
| Contract liabilities (over billings) | $22,000 |
This is the accounting side of construction work in progress. Under billing is an asset and over billing is a liability. FASB's revenue standard, Topic 606, calls them a contract asset (work done before the customer's payment is due) and a contract liability (payment received or due before the work is done), in paragraphs 606-10-45-1 to 45-3 of the standard.
Topic 606 also has you measure progress again at the end of each reporting period (paragraph 606-10-25-32). If you produce monthly financial statements, that's every month. How long contracts are taxed is a separate question for whoever prepares your taxes.
Why your surety and your bank ask for it
Your bonding company wants a WIP schedule because its underwriter reviews your work in progress before it writes a bond. The Surety & Fidelity Association of America (SFAA) lists what that review covers, including annual and interim financial statements, work in progress (bonded and non-bonded), cash flow, and evidence of a bank line of credit. Its fact sheet adds billing patterns and jobs in process.
| Schedule | Est. gross profit | Margin |
|---|---|---|
| September | $88,000 | 22% |
| October | $80,000 | 20% |
| Fade | −$8,000 | 2 points |
In plain words, your WIP schedule shows an underwriter two things: whether each job's expected profit holds from one schedule to the next, and whether your billing keeps pace with the work.
Banks read the same page. CFMA notes that banks and sureties scrutinize unapproved change orders and often take them out of the contract price until they're agreed in writing, which can shrink working capital and surety capacity. So pad the schedule with unapproved change orders, and the numbers you meant to raise can come down instead.
About bonding capacity
A clean WIP schedule doesn't guarantee a bigger bond line. The surety decides, and each surety company has its own underwriting standards. What a clean schedule gives the underwriter is numbers it can rely on.
Your bond agent (SFAA calls them surety bond producers) helps manage that capacity with you. On the CFO plan, we add bank and surety reporting. If you're a bond agent or a banker yourself, here's how we work alongside you.
How often to update a WIP schedule: every month, after the close
Finance leads quoted by the Construction Financial Management Association review the WIP with their project managers every month, and one team does it before putting together the financials for the bank and the bonding company.
A schedule kept only at year end tells you about a fading job after the fact. CFMA's point is that you may have only a short window to fix a job's problems at little cost.
Get the free WIP schedule template
| A | B | C | D | E | |
|---|---|---|---|---|---|
| 7 | Job | Contract price | Est. total cost | Cost to date | % complete |
| 8 | Warehouse reroof | $400,000 | $320,000 | $198,400 | 62.0% |
| 9 | Medical office | $600,000 | $500,000 | $425,000 | 85.0% |
| 10 | School addition | $1,000,000 | $850,000 | $340,000 | 40.0% |
| 11 | Parking deck repair | $250,000 | $200,000 | $212,000 | 106.0% |
Yellow cells are yours. The last row is a fourth sample job typed in: its cost to date passed the estimate, so it turns red.
The template is an Excel file with two tabs.
- WIP Schedule. One row per job: contract price, estimated total cost, cost to date, percent complete, earned revenue, billed to date, over (under) billed, estimated gross profit and margin, gross profit to date, cost to complete, last month's margin with the fade or gain since, and retainage held. Totals at the bottom, plus total over billed and total under billed.
- How to use it. The eight steps above, word for word.
Yellow cells are yours to fill in; everything else adds up on its own. A job turns red when cost to date passes the estimate or billing passes the contract price. The three sample jobs come filled in and marked “Sample, numbers made up”, so you can check the math before typing over them.
Get the free WIP schedule template
Excel file. The three sample jobs come filled in.
Filled it in, or stuck on step 3? Bring it to the free 13-Week Cash Review and Jordan checks it with you in 30 minutes.
If you'd rather have it kept for you
On the Controller plan, we update your WIP schedule every month, after the books close. Our standard is books closed by the 10th. The plan is $3,250 a month and includes a 13-week cash forecast checked every Monday. It's part of our construction accounting services, and you can see what each plan covers, line by line.
A year of the plan is $39,000. The national median wage for financial managers, the group controllers belong to, was $166,570 in May 2025, before benefits and payroll taxes.
Questions
Is WIP work in progress or work in process?
In construction, WIP means work in progress: jobs you've started and haven't finished. “Work in process” is an inventory term for goods being made; the IRS lists it with raw materials and finished products.
How much under billing is too much?
It depends on the job, so watch the pattern rather than one number. Under billing that grows month after month, or stays large late in a job, deserves a look, and change orders that aren't billed or approved yet are the first place to check.
What do I need to build my first WIP schedule?
Four things for each open job: the contract with its approved change orders, an updated cost estimate, the job's costs to date from a closed month, and what you've billed so far. The template does the math.
Do I need a WIP schedule if I'm not bonded?
Yes, if your jobs run longer than a month. It shows whether each job is making money while there's still time to act, not after it closes.
Who keeps the WIP schedule at year end?
We keep it current every month on the Controller and CFO plans. At year end, your tax preparer gets the year-end WIP schedule, along with books that are closed and reconciled and the year-end balance sheet and profit and loss.