Construction Bookkeeping
WIP Schedule for Contractors: What It Is and How to Build One
Quick answer
A WIP (work in progress) schedule lists every open job with its contract price, costs to date, estimated cost to complete, percent complete and billings to date. From those numbers it shows each job's earned revenue, expected profit and whether you are over or under billed. It works only if job costs are recorded accurately and estimates to complete are updated honestly.
Most contractors know their bank balance and their backlog. Fewer can say, job by job, whether they have billed more than they have earned or less. The WIP schedule answers that. Banks and bonding companies ask for it, but its real value is to you: it surfaces a losing job while there is still time to act.
What goes into a WIP schedule
- Contract price. The current contract value including approved change orders.
- Costs to date. Everything charged to the job so far: labor, materials, subs, equipment and allocated overhead.
- Estimated cost to complete. Your best current guess of what remains, updated as the job changes.
- Percent complete. Costs to date divided by total estimated cost, under the cost-to-cost method.
- Billings to date. What you have actually invoiced, including retainage held.
Over billed and under billed
Earned revenue is the contract price times the percent complete. If billings exceed earned revenue, the job is over billed: you hold cash you have not earned yet, which is a liability, not profit. If billings are below earned revenue, the job is under billed: you have done work you have not invoiced, which strains cash. A healthy job stays close to earned revenue, slightly ahead is common, far ahead or far behind deserves a look.
A small example
A $500,000 job has $300,000 of costs posted and you estimate $100,000 more to finish. Total estimated cost is $400,000, so the job is 75 percent complete and earned revenue is $375,000. You have billed $350,000, so the job is under billed by $25,000. Expected profit is $100,000 if the estimate holds. If the estimate to finish is really $180,000, the job is 62.5 percent complete, profit drops to $20,000, and the WIP just told you something the bank balance could not.
Why WIP numbers go wrong
The schedule is only as good as its inputs. The three usual problems: costs posted to the wrong job or the wrong month, change orders worked but not yet in the contract value, and estimates to complete that never change because nobody wants to deliver bad news. Monthly job costing discipline fixes the first two. The third is a habit: update the estimate every month, especially when the field says the job changed. Our guide to [job costing for contractors](/blog/job-costing-for-contractors) covers the cost side.
How often to update it
Monthly, right after the month is reconciled, while the numbers are fresh. A WIP built quarterly or at year end is history, not a management tool. Pair it with the [accounts receivable aging](/glossary/accounts-receivable-aging) so earned-but-unbilled work and billed-but-unpaid invoices are reviewed together.
How Mispar helps
Mispar keeps job costs current in your own QuickBooks Online or Xero file: labor, materials, subs and equipment posted to the right job every month, so your WIP starts from clean numbers. Your CPA or advisor can then rely on the schedule for revenue recognition and bonding. [Bookkeeping for contractors](/industries/contractors) starts at $229/mo.
Frequently asked questions
Is a WIP schedule required?
Not by law for most contractors, but banks, bonding companies and many CPAs ask for one, and it is the clearest view of job health you can build from your own books.
What method does the percent complete use?
The common approach is cost to cost: costs to date divided by total estimated cost. Your CPA decides the method for tax and financial statements.
Is over billed money profit?
No. It is cash collected ahead of earned revenue, a liability often called billings in excess of costs. You still owe the work.
Can QuickBooks produce a WIP schedule?
QuickBooks Online can produce job cost and estimate-versus-actual reports. A formal WIP schedule is usually built from those numbers, often in a spreadsheet or by your CPA.
Keep reading
Contractors
Job Costing for Contractors: What It Is and How to Do It
Job costing shows which jobs make money and which do not. Plain-English guide for contractors: what to track, simple examples, and common mistakes.
Industry-Specific
Bookkeeping for Contractors and Trades Businesses
Contractors and trades businesses have bookkeeping quirks most general bookkeepers don’t handle well — job costing, retainage, progress billing, and equipment. Here’s what to get right.
Cash Flow
How to Get Your Invoices Paid Faster: A Small Business Guide to Accounts Receivable
Most late payments are not a customer problem. They are a process problem. Here is the invoicing discipline that gets small businesses paid sooner, and the reports that show you exactly who owes what.
Written by
is a Senior Account Manager at Mispar who works directly with small business owners and freelancers to keep their books clean, reconciled, and tax-ready every month.
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