Work-in-progress (WIP) reporting is one of the most important financial tools a construction company uses. It measures how much of a contract is complete and aligns revenue recognition with actual progress on each project.
Why WIP Reporting Matters
Accurate WIP schedules help you recognize revenue correctly under percentage-of-completion accounting, identify projects that are over- or under-billed, and spot margin erosion before it becomes a loss. They also give bonding companies and lenders confidence in your numbers.
What a Strong WIP Report Includes
- Contract value and revised contract value reflecting approved change orders
- Costs to date compared to total estimated costs
- Percent complete based on costs incurred
- Revenue earned versus revenue billed
- Backlog remaining on each project
Common WIP Problems
Inaccurate cost estimates, late job cost entry, and unmapped change orders distort percent complete and mislead decision-makers. Reviewing WIP monthly — with current, accurate job cost data — keeps your financials reliable.
This content is provided for general educational purposes and is not a substitute for legal, tax, insurance, or individualized financial advice.
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