HOW TO READ A WIP SCHEDULE IN CONSTRUCTION.
A WIP schedule tracks five things per job: contract value, total estimated cost, percent complete, revenue earned, and costs incurred. The math between those five columns tells you whether each job is overbilled or underbilled, and whether it is trending to make or lose money. Most contractors have a WIP schedule because their surety requires it. Almost none of them can explain what every number means or how to use it to manage a job.
The WIP schedule is not an accounting report. It is a management tool. Read correctly it tells you which jobs are bleeding before the month-end P&L shows the damage. Read wrong — or not read at all — it is just a form you fill out for your bonding agent.
Contract Value — the total amount you are contracted to receive. This is fixed unless a change order modifies it.
Estimated Cost to Complete — your current best estimate of total cost to finish the job. This is the number PMs must update monthly. If it is not being updated, your WIP is wrong.
Percent Complete — calculated as costs incurred to date divided by total estimated cost. Not units installed. Not schedule progress. Cost.
Revenue Earned — contract value multiplied by percent complete. This is what you have actually earned, regardless of what you have billed.
Costs Incurred — actual job costs charged to date. Direct labor, material, equipment, subcontractors.
Overbilled means you have billed more than you have earned. Revenue earned is $400,000 but you have billed $460,000. The $60,000 difference is a liability — you owe that work to the owner. It is not cash you have earned. Many subcontractors mistake overbilling for cash strength. It is not.
Underbilled means you have earned more than you have billed. Revenue earned is $400,000 but you have only billed $340,000. The $60,000 is a receivable you have not invoiced yet. This is where lost cash hides. If your WIP shows consistent underbilling, you have a billing discipline problem — not a performance problem.
Profit fade is when the estimated gross margin on a job decreases from month to month as the job progresses. A job that estimated 26% gross margin at contract is showing 19% at 60% complete. That 7-point fade has to be explained. Did labor run over? Was there a scope change that was not captured? Is the cost-to-complete estimate wrong?
The WIP schedule catches profit fade before the job finishes. That is the only time there is anything left to do about it. By the time the final billing hits, the margin is locked in. Review at 30% complete is mandatory. Review at 60% complete is critical.
FLAT MONTHLY FEE. NO SURPRISES.
Two tiers based on trailing 12-month revenue. No hourly billing. No payroll. No add-ons.
| Revenue | Core Financial | Executive Financial |
|---|---|---|
| Under $1M | $1,900/mo | $2,900/mo |
| $1M–$3M | $2,600/mo | $3,600/mo |
| $4M–$6M | $3,800/mo | $5,500/mo |
| $7M–$9M | $5,100/mo | $6,900/mo |
| $10M–$12M | $6,100/mo | $8,500/mo |
| $13M+ | Quoted | Quoted |
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