What is a
WIP schedule?

The short answer

A WIP (work-in-progress) schedule is a job-by-job table that compares how much of each job you've actually completed against how much of it you've billed. That comparison tells you, for every active job, whether you're ahead of your billings, behind them, or on track — and whether the profit you think you're making is real.

Your P&L can look healthy while two jobs quietly drift under-billed and drain your cash. The WIP schedule is the report that catches it — months before your bank balance does.

What's actually on it

A WIP schedule has one row per active job. The core columns:

• Contract value — the current total price of the job, including approved change orders.
• Estimated total cost — what you expect the whole job to cost when it's done.
• Costs to date — what you've actually spent so far.
• Percent complete — costs to date ÷ estimated total cost. (This is the "cost-to-cost" method — the standard for percentage-of-completion accounting.)
• Earned revenue — contract value × percent complete. The revenue you've genuinely earned by doing the work.
• Billed to date — what you've actually invoiced the customer.
• Over / under billing — billed to date minus earned revenue. This column is the whole point.

Over-billed vs. under-billed — what it means

Over-billed (billings > earned revenue)

You've invoiced ahead of the work you've completed. Cash feels great — but you're holding money for work you still owe. On the balance sheet it's a liability ("billings in excess of costs"). A little over-billing is healthy and normal; heavy over-billing means the back end of the job will consume cash with nothing left to bill.

Under-billed (earned revenue > billings)

You've done work you haven't invoiced yet. You are effectively financing your customer's project out of your own pocket. Chronic under-billing is the #1 reason contractors feel broke while their P&L says they're profitable. Sometimes it's just slow billing; sometimes it signals unapproved change orders or cost overruns nobody has faced yet.

A quick example

Job B is the one to worry about: $70,000 of completed work not yet invoiced — that's cash sitting in the ground.

In this example, the P&L would show all three jobs "profitable." Only the WIP schedule reveals that Job B is $70,000 behind on billings — and if that's from unapproved change orders, the profit on that job may not be real at all.

Why banks and sureties require it

If you carry a line of credit or bid bonded work, your lender and surety will ask for a WIP schedule — usually quarterly, sometimes monthly. They use it to see whether your reported profit is trustworthy: profit fade (jobs whose margin shrinks as they progress) and chronic under-billing are the two red flags they look for. Contractors who show up with a clean, current WIP schedule get better bonding capacity and smoother renewals. Contractors who scramble to build one the week before renewal… don't.

How often should it be updated?

Monthly. A quarterly WIP schedule tells you about problems three months after you could have fixed them. Updated monthly — as part of the regular close — it becomes an early-warning system: under-billing gets caught while there's still time to submit the draw, and fading jobs get flagged while there's still margin to protect.

What you need to produce one

1. Job costing — every cost coded to a job, consistently.
2. Reliable cost estimates — an honest estimated-cost-at-completion for each job, updated when things change.
3. Clean, current books — a WIP schedule built on unreconciled books is fiction with columns.

This is why WIP reporting isn't a report you bolt on — it's the output of an accounting process built for construction from the ground up.