What a WIP report actually shows
For each open job, a WIP report lines up a handful of numbers:
- Contract value. The total you'll be paid.
- Estimated total cost. Your budget.
- Costs incurred to date. What you've actually spent so far.
- Percent complete. Usually cost-to-cost: costs to date / estimated total cost. (See percent complete methods.)
- Earned revenue. Percent complete × contract value. What you've earned based on work done.
- Amount billed to date. What you've actually invoiced.
- Over/under billing. The difference between earned and billed.
That last number is the whole point.
Over-billed vs. under-billed: why it matters
Over-billed (billings exceed earnings): you've invoiced more than you've earned. Common with front-loaded deposits. The cash in your account isn't all yours yet, because you owe work against it. This is a liability. Spend it like profit and you'll be short when the costs land.
Under-billed (earnings exceed billings): you've done more work than you've invoiced. You're effectively financing your client. This is money you've earned but haven't collected, an asset, and often a sign you're behind on your own billing paperwork.
Neither is automatically bad, but you need to know which you are. A contractor who feels flush because the bank balance is high, while sitting on heavy over-billings across several jobs, is heading for a cash-flow wall.
A simple worked row
One job:
- Contract value: $100,000
- Estimated cost: $80,000
- Costs to date: $40,000
- Percent complete: $40,000 / $80,000 = 50%
- Earned revenue: 50% × $100,000 = $50,000
- Billed to date: $60,000
- Over-billed by $10,000. You've invoiced $10,000 more than you've earned. Treat that as owed work, not profit.
Run that row for every open job, total the columns, and you have your WIP report.
How small GCs should use it
- Update it monthly. Line up all open jobs and refresh percent complete and costs.
- Watch the over/under totals. Large over-billings across the board mean your cash is partly borrowed against unfinished work.
- Catch stale billing. Big under-billings usually mean you're behind on invoicing, so go send the draws.
- Sanity-check your margins. If costs-to-date are outrunning your budget, the WIP report flags the job before it's a disaster. Pair it with cost-to-complete forecasting.
Your accountant will also thank you. A clean WIP report makes year-end and any financing conversation far smoother, and lenders often ask for one directly.
Keep the inputs honest
A WIP report is only as good as its percent complete and cost data. Measure progress carefully and keep your cost baseline realistic. The Construction Price Index helps you gut-check whether a budget was sound to begin with.
Where this fits
The WIP report is the reporting layer of earned value tracking and a practical everyday tool of construction project management. It turns your progress numbers into a clear read on cash.
Put it to work
TradesMetrics builds your WIP view automatically from the estimate you create in the free estimating tool and the progress you log: over/under billing on every job, no spreadsheet required. See how it works.