Most contractors have heard of a WIP report (Work-in-Progress), and many even have one. But few truly know how to read it—or how much it can reveal about the financial health of their business.
We like to call it the One Report to Rule Them All (Melissa’s favorite, if you’re wondering 😄). Why? Because it connects your field performance, project management, and financial results into a single document.
Let’s break down why your WIP report matters—and what it’s really telling you.
What Is a WIP Report?
A Work-in-Progress (WIP) report tracks each job you’re working on and shows:
- How much revenue you’ve earned (based on percent complete)
- How much you’ve billed to date
- How much profit you’ve made (or lost)
- What’s left to do
If you’re using percentage-of-completion accounting (and most commercial contractors should be), the WIP is your bridge between operations and finance.
What Your WIP Report Tells You
- Underbilling & Overbilling
Your WIP reveals if you’ve:
- Underbilled (you’ve earned more than you’ve invoiced)
- Overbilled (you’ve invoiced more than you’ve earned)
Both affect your cash flow and profit. Underbilling can create cash flow issues. Overbilling looks good short-term—but can make future periods tough.
Quick Tip: Regular WIP reviews can help you manage cash flow before it becomes a problem.
- Job Performance
If your estimated cost and actual cost are far apart, your WIP will show it.
- Are your jobs profitable?
- Are costs higher than expected?
- Are some jobs carrying your entire margin?
Your WIP helps you spot trends like slippage, missed change orders, or bad estimating.
- Revenue Timing
WIP smooths out the ups and downs of billing.
If you only look at your Income Statement without WIP adjustments, your financials will be all over the place. One month looks great, the next looks terrible—and nothing changed operationally.
With WIP, revenue reflects work performed, not just what’s been billed.
- Future Backlog
The WIP report gives insight into your remaining revenue and cost-to-complete. That tells you:
- How much work is left
- How much revenue is in the pipeline
- Whether you’re on pace to hit your goals
This data can flow straight into a financial projection, giving you a forward-looking view of profitability and cash flow.
3 Mistakes to Watch For
- Not updating cost-to-complete → Old numbers = misleading results
- No integration with financials → WIP should tie directly to your Income Statement & Balance Sheet
- Not reviewing WIP regularly → WIP should be reviewed monthly, not just at year-end
What Bonding Companies Look For in Your WIP
If you’re trying to grow with bonding, this part matters.
Bonding companies will review your WIP report to understand:
- Project margins
- Backlog health
- Under/overbilling trends
- Whether your financials are accurate
Want higher bonding limits? It starts with clean, consistent WIP reporting.
Next Steps for Contractors
- Don’t wait until year-end or a bonding request to build your WIP
- Tie it into your month-end reporting
- Use it to update your projections and track backlog
The contractors we work with use WIP reports every month to improve cash flow, increase margin, and impress bonding companies.
Want Help Building or Improving Your WIP Report?
We’ve helped contractors across the U.S. build better WIP systems—and connect the dots between jobs, cash flow, and bonding capacity. If you’re ready for a better WIP and better decisions, let’s talk.