WIP REPORTING FOR A BONDING REVIEW.
An underwriter reads a WIP schedule and a balance sheet as one document, because the overbilled column on the schedule is where part of the working capital on the balance sheet came from. Billing ahead of progress puts cash in the account and creates a liability that reverses as the work gets built, so a company sitting on a heavy overbilled position with a current ratio down at the 1.3 low end of the CONTROL Book range is running on working capital borrowed from its own jobs. What to change before the next review: close the books and the bank reconciliations by the tenth so the schedule ties to the balance sheet, revise cost to complete on every open job, and show each overbilled and underbilled position in dollars rather than netting them into one figure.
Overbilling reads worse to an underwriter than to an owner because the two of them are looking at the same dollars twice. On the balance sheet it's cash and a billings in excess of costs liability. On the schedule it's margin that hasn't been earned yet. The owner sees a healthy account and a strong month, and the underwriter sees a company that has already billed work it hasn't built. None of that's fraud and none of it needs a restatement. It needs the schedule to disclose the position job by job, so the balance sheet can be read for what produced it instead of taken at face value.
WHAT IT MEANS.
WIP reporting for bonding is the monthly work in progress schedule presented so an underwriter can read the overbilled and underbilled position on every job against the balance sheet those positions produced.
The four balance sheet standards the CONTROL Book states numerically are the ones this schedule gets read against: working capital at 10 to 15 percent of annual revenue with 13 percent as the target, a current ratio between 1.3 and 2.0, debt to equity below 1.0, and $650,000 of cash for a company running the full system. A bank will lend against a looser debt to equity ceiling, and that's a covenant rather than this standard.
Those four are balance sheet figures and the WIP is a job schedule, and the two columns that join them are overbilled and underbilled. An overbilled position sits in current liabilities as billings in excess of costs, so it lifts cash and current liabilities together and pulls the current ratio down. An underbilled position sits in current assets as costs in excess of billings, which is work performed and not yet invoiced. Both move the ratios an underwriter is reading, and neither one appears anywhere on a profit and loss statement.
FOUR THINGS THE SCHEDULE GIVES AWAY.
Working capital borrowed from the jobs
Working capital at 10 to 15 percent of annual revenue is the CONTROL Book standard, and a company can hit it while most of the balance is billings collected ahead of the work. The overbilled column is where that gets checked, because the liability reverses as the work gets built and the working capital goes with it. Hitting the figure and being able to keep it are two different questions, and only the schedule answers the second.
The schedule and the books close on different days
Books closed and bank reconciliations finished by the tenth is the CONTROL Book cadence, and a WIP built off open books produces two documents that disagree with each other. The first thing an underwriter does is tie the schedule to the balance sheet, so a disagreement gets found in the room rather than disclosed in advance. A schedule dated six weeks back is history, and history is a weaker answer than the current month.
One schedule, and no trend behind it
Thirteen months of history is what lets the trailing twelve be averaged and this month be compared against the same month a year ago. A single schedule is a position, and a position with nothing behind it can't tell an underwriter whether the overbilled column is seasonal or growing. The balance sheet standards have the same problem, because a current ratio inside the 1.3 to 2.0 range reads one way climbing and another way falling, and one dated page can't say which it's doing.
The funding question the WIP can't answer
After the schedule comes the question of how the backlog gets funded, and that's a timing question about weeks rather than a position at a date. The 13 week cash flow forecast answers it, and the CONTROL Book treats that forecast as a decision tool rather than a report. Walking into a review with a schedule and no forecast leaves the largest question on the table for the underwriter to settle with an assumption.
WHAT TO CHANGE THIS MONTH.
The tenth of the month is the CONTROL Book cadence for closing the books and finishing the bank reconciliations, and it's what lets the schedule tie to the balance sheet without somebody reconciling the two live in the meeting. Closing first also answers the timing question, because a schedule dated the tenth is the current month. Anything older is a document about a quarter that has already been decided.
Go job by job with the project managers and put a current number on the remaining work instead of the original budget minus what has been spent. Jobs where the remaining cost has moved are the ones the review will find anyway, and finding them two weeks earlier turns a discovery into a disclosure. Whether those projections then hold up against actual closeouts is a separate test, and the surety WIP requirements page carries it.
Put the overbilled or underbilled dollar amount on each job, then put the four standards beside the schedule: working capital as a percentage of annual revenue against the 10 to 15 percent range and the 13 percent target, the current ratio against 1.3 to 2.0, debt to equity against the 1.0 ceiling, and the cash balance. An underwriter is going to do that arithmetic anyway. Doing it first is the difference between answering questions and being asked them.
Thirteen months of history in the monthly report lets the trailing twelve be averaged and this month be set beside the same month last year. One schedule is a position and thirteen is a direction, and a review that can see the direction spends its time on the plan and not on whether the number is real. The same thirteen months carry the balance sheet standards, so the working capital percentage and the current ratio turn up with a trend behind them.
The 13 week cash flow forecast is where the weeks in which the overbilled liability reverses become visible, which is the question the schedule raises and can't settle. The CONTROL Book treats the forecast as a decision tool rather than a report, and in a review it does the same job, because it turns the overbilled position from a finding into a funded plan. Take it to the meeting with the schedule rather than promising to send it afterward.
THE OUTPUTS, NAMED.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
Pricing
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
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