By Adam Hicks, CooperBuild AI · November 4, 2026

A construction WIP report (work-in-progress schedule) lists every open job with its contract value, estimated total cost, costs to date, percent complete, earned revenue and billings to date, so you can see whether each job is overbilled or underbilled and whether its profit is holding. Run it monthly at close for every job that crosses a month-end. Read the over/under billing column and the change in projected gross profit first, because that's where cash problems and profit fade show up before they hit the bank account.

If you already track job costs, the construction WIP report is the next step. It turns job-level numbers into one company-wide view that your CPA, your banker and your surety all read. Below is how to build one, how to read it, and what to do when the numbers look wrong.

#What is a construction WIP report?

A WIP report is one row per active contract at a single point in time, usually month-end. The IRMI overview of surety underwriting and WIP (opens in a new tab) calls it "one of the MOST important reports produced by contractors" and notes it's built on percentage-of-completion accounting under GAAP.

The core columns are:

• Contract value, including approved change orders
• Estimated total cost at completion, updated every month
• Estimated gross profit, which is contract value minus estimated total cost
• Costs to date from your job cost records
• Percent complete
• Earned revenue
• Billings to date
• Over or under billing

Best-practice versions also show the original bid margin next to the current one, so you can see movement month to month.

#How do you calculate percent complete and earned revenue?

Most contractors use the cost-to-cost method:

• Percent complete = costs to date ÷ estimated total cost
• Earned revenue = contract value × percent complete
• Over/(under) billing = billings to date − earned revenue

Here's a worked example with illustrative numbers. Job A has a $1,000,000 contract and an $850,000 estimated cost. You've spent $425,000, so it's 50% complete and you've earned $500,000. You've billed $560,000, so Job A is overbilled by $60,000.

Job B has a $400,000 contract and a $340,000 estimated cost. You've spent $272,000, so it's 80% complete and you've earned $320,000. You've billed $280,000, so Job B is underbilled by $40,000.

The math is simple. The hard part is the estimated total cost. If that number is stale, every column after it is wrong.

#What does overbilling mean on a WIP report?

Overbilling means you've billed more than you've earned. On the balance sheet it's a liability, often labeled "billings in excess of costs and estimated earnings."

Modest overbilling isn't bad. IRMI notes that sureties generally view it positively because the owner is financing the work instead of you. The risk is spending it. UFG Insurance's guide to WIP schedules (opens in a new tab) says underwriters want to confirm that the extra cash is still available to fund the rest of the job, and that using it for equipment, real estate or bonuses can hurt your bonding capacity.

A practical check: total overbillings across all jobs should be covered by cash and receivables. If they aren't, a front-loaded schedule of values may be funding last month's payroll on another job.

#What does underbilling mean, and why is it a warning sign?

Underbilling means you've done more work than you've billed. It's recorded as an asset, but it means you're financing the owner's job with your own cash.

The NASBP article on underbilling (opens in a new tab) lists the usual causes: timing differences, unapproved change orders and disputed work. Some underbilling is normal early in a job because of mobilization and startup costs. IRMI warns that late-stage underbillings can mean profit projections are more optimistic than reality.

When a job shows a large underbilling, ask three questions:

• Is there approved work we simply haven't billed yet? Bill it on the next pay application.
• Is there change order work we did but can't bill yet? Push the change order to approval. Our change order process guide covers how.
• Is the estimated cost too low? If so, the job isn't underbilled. It's losing margin, and the forecast needs to change.

#What is profit fade, and how does the WIP report show it?

Profit fade is when a job's projected gross profit shrinks over time. You bid a job at 15% margin, and three months later the WIP shows 11%. The work didn't get cheaper to finish. Your forecast caught up with reality.

Sureties watch this closely. McConkey Insurance (opens in a new tab) says consistent profit fade, unexplained margin swings and large underbillings raise questions about how well management sees its projects. One bad job usually isn't the issue. A pattern of fade across jobs is.

The fix starts upstream. Fade usually comes from cost-to-complete forecasts that only get updated when someone is forced to. Have the PM sign off on the estimated cost at completion for each job every month, before the WIP is finalized.

#How often should a GC run a WIP report?

Monthly, at month-end close, for every job that will cross an accounting period. Contractors on Reddit make a fair point that a remodeler running short jobs that are invoiced and closed in a few weeks may not need a formal schedule yet. In a r/GeneralContractor thread on WIP reports (opens in a new tab), one commenter put the trigger this way: when cash looks fine but you can't tell which open jobs are actually making money.

Once you're running multi-month jobs with monthly progress billing, the WIP earns its keep. Include jobs completed since the last report too, so you can compare final margins to bid margins.

#Can you build a WIP report in QuickBooks?

Not natively, in the way construction needs it. QuickBooks Online tracks job income and costs well when every transaction is tagged to a project. But in a r/Construction thread on WIP reports in QuickBooks (opens in a new tab), contractors describe pulling job cost reports into a spreadsheet every month to calculate percent complete and over/under billing.

That works, but it has two weak points. Estimated cost at completion lives in someone's head or a separate file, and approved change orders often lag in contract value. Both break the math. Our construction job costing guide covers the cost side, and the retainage guide covers how retainage affects billings. Most contractors report billings gross of retainage and track retainage receivable separately. Confirm the treatment with your CPA.

#Does the WIP report change how I pay taxes?

Not automatically. Tax accounting can differ from the GAAP numbers on your WIP. Under 26 U.S.C. § 460(e) (opens in a new tab), home construction contracts are exempt from the percentage-of-completion requirement. So are other construction contracts expected to finish within two years when the contractor meets the gross receipts test. For tax years beginning in 2026, that test is average annual gross receipts of $32 million or less for the prior three years, per IRS Rev. Proc. 2025-32 (opens in a new tab). Your CPA decides the tax method. The WIP is still how you manage the jobs.

#How do you keep WIP numbers trustworthy?

• One contract value. Approved change orders should update the contract the same day they're signed.
• Monthly cost-to-complete. The PM owns the forecast, and finance owns the math.
• Costs coded as they happen. Missing costs make a job look less complete and more profitable than it is.
• Billings tied to the schedule of values. If your pay app and your WIP disagree, fix the source, not the spreadsheet.

Most WIP problems come from re-keying the same numbers across an estimating tool, a PM tool, a billing spreadsheet and the ledger. CooperBuild AI keeps estimates, budgets, change orders, billing and built-in accounting (GL, AP and AR) in one system, and it connects to QuickBooks Online if that's where your books live today. If your WIP still starts with an export every month, get started with free credits, no credit card needed, and run your next close from one set of numbers.

#FAQ

#What is a construction WIP report?

A construction WIP report is a schedule of every open contract at a point in time, showing contract value, estimated total cost, costs to date, percent complete, earned revenue, billings to date and the resulting overbilling or underbilling.

#How do you calculate overbilling and underbilling?

Divide costs to date by estimated total cost to get percent complete. Multiply that by contract value to get earned revenue. Subtract earned revenue from billings to date. A positive result is overbilling and a negative result is underbilling.

#Is overbilling good or bad for a contractor?

Modest overbilling is generally healthy because the owner is funding the work. It becomes a problem when the extra cash is spent on other jobs, equipment or distributions instead of being held to finish the job.

#Why do sureties care about the WIP schedule?

Sureties use the WIP schedule to judge whether open jobs will finish at their projected margins and whether the contractor can fund them. Repeated profit fade and large underbillings are common red flags.

#How often should a WIP report be updated?

Update it monthly at month-end close, with a fresh estimated cost at completion for every active job. Include jobs completed since the last report so final margins can be compared to bid margins.