How to Read a WIP Schedule Construction (Copy)

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TL;DR: A construction WIP schedule shows the financial position of every active job. The key columns: contract value, estimated cost at completion, actual cost to date, percentage complete (cost to date divided by estimated total cost), revenue earned (percentage complete times contract value), amount billed to date, and overbilled or underbilled (revenue earned minus amount billed). Underbilled is a receivable you have not invoiced. Overbilled is cash you collected for work not yet complete.

Overview

What You Need to Know

The WIP schedule translates job costing data into a picture of the business financial position at a point in time. A company with five active jobs has five different financial positions that together determine whether the business is ahead or behind on revenue recognition, billing, and projected profitability.

The Key Columns

What Every WIP Number Actually Means

Column	What It Shows	How It Is Calculated
Contract Value	Total approved contract amount including change orders	Original contract plus all approved change orders to date
Estimated Cost at Completion	Total estimated direct cost to complete the job	Updated from original estimate based on actual cost trajectory
Actual Cost to Date	Total direct costs posted to the job in ControlQore	Sum of all cost codes for the job to the report date
Percentage Complete	How far through the job you are financially	Actual cost to date divided by estimated cost at completion
Revenue Earned	Revenue you have legitimately earned through work performed	Percentage complete times contract value
Amount Billed	Total invoiced to the GC through the report date	Sum of all pay apps submitted and approved
Overbilled / Underbilled	Difference between billing and earned revenue	Revenue earned minus amount billed (negative = overbilled)
Projected Final Margin	Expected gross margin at job completion	(Contract value minus estimated cost at completion) divided by contract value

Overbilled vs Underbilled

The Two Positions That Matter Most

Underbilled (Good Problem)

You have done more work than you have invoiced. Revenue earned exceeds amount billed. Underbilling is a receivable you have not sent yet. It is not a cash flow problem but it signals that pay apps need to be submitted. Common causes: billing cutoff timing, delayed pay app submission, or a GC payment dispute on an earlier pay app that held up subsequent billing.

Overbilled (Warning Sign)

You have invoiced more than you have earned. Amount billed exceeds revenue earned. Overbilling means you have collected cash for work not yet complete. It is a liability on the balance sheet. Persistent overbilling can indicate front-loaded SOV billing, aggressive percentage complete estimates, or a job that is going over budget (actual costs increasing faster than the billing)

FAQ

Frequently Asked Questions

How is percentage complete calculated on a WIP schedule?

Percentage complete is calculated using the cost-to-cost method: actual cost to date divided by estimated cost at completion. If a job has $240,000 in actual costs posted and the estimated total cost is $400,000 the job is 60% complete. That 60% times the contract value ($500,000) equals $300,000 in revenue earned. If $280,000 has been billed the job is $20,000 underbilled.

What is underbilled on a WIP schedule?

Underbilled (also called under-billed or costs in excess of billings) is the amount by which revenue earned exceeds amount billed. A $20,000 underbilled position means you have done $20,000 more work than you have invoiced. It is a receivable not yet sent. Underbilled is shown as an asset on the balance sheet.

What is overbilled on a WIP schedule?

Overbilled (also called over-billed or billings in excess of costs) is the amount by which amount billed exceeds revenue earned. A $15,000 overbilled position means you have invoiced $15,000 more than you have earned through work performed. It is a liability - cash collected ahead of earnings. Overbilled is shown as a liability on the balance sheet.

How often should a WIP schedule be produced?

Monthly. The WIP schedule needs to be current enough to inform the monthly CFO meeting and financial reporting. Quarterly WIP is too infrequent to catch job problems before they compound. Daily WIP is unnecessary for most subcontractors at $1M-$12M. Monthly from actual ControlQore data is the frequency that produces meaningful variance tracking and the 24-month accuracy record that sureties and buyers value.

How to Read aConstruction WIP Schedule.