If your banker, bonding agent, or CPA has ever asked for a “WIP schedule” and you didn’t know what they were talking about — this guide is for you. The Work-in-Progress (WIP) schedule is the most important financial report unique to the construction industry. It’s also the report that most contractors’ bookkeepers don’t know how to produce. Bookkeeping Champs creates monthly WIP schedules for contractors throughout Los Angeles and Southern California. 📞 (818) 679-4451
What Is a WIP Schedule?
A Work-in-Progress schedule is a spreadsheet or report showing the financial status of every active construction project. For each project, it shows: original contract amount, approved change orders, revised contract total, costs incurred to date, estimated cost to complete, total estimated cost, percentage complete (costs incurred ÷ total estimated costs), earned revenue (% complete × contract total), billings to date, and the over- or under-billing position (earned revenue minus billings to date).
How to Calculate Percentage Complete
The most common method (cost-to-cost) calculates percentage complete as: Costs incurred to date ÷ Total estimated costs = % Complete. Example: A $500,000 project with total estimated costs of $400,000. You’ve spent $200,000 so far. % Complete = $200,000 ÷ $400,000 = 50%. Earned revenue = 50% × $500,000 = $250,000.
Understanding Over-Billing and Under-Billing
Over-billed: You’ve billed more than you’ve earned. This is actually a cash flow benefit in the short term (you have the owner’s money) but a liability on your balance sheet. Banks and sureties watch this carefully — a large over-billed position suggests risk of having to return money if the project is terminated or disputed. Under-billed: You’ve done more work than you’ve collected for. This is an asset — money you’ve earned but not yet billed. Chronic under-billing is a cash flow warning sign — you’re essentially financing your clients’ projects with your own money.
Why Your Surety Cares About Your WIP Schedule
Surety companies use your WIP schedule to evaluate: How much work do you have in progress? Are you over- or under-billed (and by how much)? What is your backlog? Are any projects projected to come in at a loss? A contractor with clean, accurate WIP schedules consistently achieves higher single and aggregate bond limits than one who submits only a P&L and balance sheet. Bookkeeping Champs has helped LA contractors double their bonding capacity within 12 months of implementing monthly WIP reporting.
Get Monthly WIP Schedules — Call (818) 679-4451
Bookkeeping Champs produces monthly WIP schedules for contractors throughout Los Angeles, San Fernando Valley, Ventura County, and Santa Clarita. If your bookkeeper doesn’t know what a WIP schedule is — call (818) 679-4451 and let’s fix that.
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