3D WIP Report
FINANCIAL TRAINING

Mastering the Work in Progress (WIP) Report

A WIP report is the ultimate dashboard of your project's financial health. It reconciles estimated costs against actual field spending to tell accounting exactly how much revenue you have earned and whether you are billing ahead or falling behind.

-27.85%
Gross Margin (Projected)
$351,442.41
Overbilled Position (Sage Job #53617)

1. WIP 101 — The Complete Guide for Project Managers

Everything a PM needs: what a WIP report is, what it's used for, how it works, how to fill it out, and why it matters. Read this first, then practice in the other tabs.

1

What is a WIP report?

A Work in Progress (WIP) report is a financial snapshot of every active, unfinished construction project, taken at a point in time — usually once a month at financial close.

For each job it lines up three things and reconciles them:

  • What you've billed the client (invoiced to date)
  • What you've actually spent (cost to date)
  • What you still expect to spend to finish (your forecast)

From those it answers the two questions leadership cares about: "How much revenue have we truly earned on this job?" and "Is this job healthy, or is it bleeding money?"

One-line definition: A WIP report turns raw job costs and invoices into earned revenue and a health score for every open project.
2

What is it used for? (Why it exists)

A WIP report isn't busywork — five different groups depend on it:

Revenue Recognition (GAAP)

Under GAAP, construction recognizes revenue by percentage‑of‑completion — you earn revenue as you incur cost, not when you send an invoice. The WIP is what calculates that earned revenue.

Profit-Fade Early Warning

It catches cost overruns eroding your margin this month, while you can still act — instead of discovering the loss at closeout.

Cash-Flow Management

The over/under-billing line tells you whether the client is financing the job (good) or you are (bad).

Bonding & Banking

Sureties and banks require a WIP schedule to extend bonding capacity and credit. Sloppy WIPs shrink how much work you can take on.

Executive Visibility

Leadership sees the true financial health of every open job on a single sheet, ranked by risk.

3

How it works — the math chain

Five formulas do all the work. Each one feeds the next, so a single number (your forecast) drives the whole report:

  1. Revised Cost Estimate Cost to Date + Cost to Complete What the job will cost in total once it's done.
  2. % Complete (earned) Cost to Date ÷ Revised Cost Estimate How far along you are, measured in dollars spent.
  3. Earned Revenue % Complete × Contract Price The revenue GAAP says you've actually earned so far.
  4. GAAP Over/Under Billing Earned Revenue − Total Billed + = underbilled (asset). − = overbilled (liability).
  5. Gross Margin % (Contract Price − Revised Cost Estimate) ÷ Contract Price The job's projected profitability.
Worked example

Contract $1,000,000 · Cost to Date $450,000 · Cost to Complete $300,000 · Billed $700,000:

  • Revised Cost = 450k + 300k = $750,000
  • % Complete = 450k / 750k = 60%
  • Earned Revenue = 60% × 1,000k = $600,000
  • GAAP Over/Under = 600k − 700k = −$100,000 overbilled (liability)
  • GM% = (1,000k − 750k) / 1,000k = 25%
4

Who owns each number?

This is the part PMs get wrong most often. Most of the WIP is not yours to make up — it's pulled from the accounting system or calculated automatically. You own exactly one forecast.

Accounting provides

Contract Price, Total Billed, Total Cost to Date — the actuals straight from Sage.

Contract provides

Approved Change Orders (CORs) — signed scope additions that raise the contract value.

You (the PM) provide

Cost to Complete (CTC) — your field-validated forecast of the remaining cost to finish. This is the one number you own.

Calculated automatically

Revised Cost, % Complete, Earned Revenue, GAAP over/under billing, GM%, Left to Bill — all math from the numbers above.

5

How to fill it out

Because you only own one number, filling out a WIP is mostly gathering actuals and then forecasting carefully:

  1. Pull the actuals from Sage — contract value, total billed (incl. retention), and total cost to date as of the cutoff.
  2. Log approved CORs — only signed change orders count toward contract price.
  3. Forecast your Cost to Complete — go task-by-task on what's left in the field. Do NOT just subtract cost-to-date from the budget — that hides overruns.
  4. Review the calculated results — check GM%, over/under billing, and Left to Bill for red flags before you submit.

Ready to build a real one? The wizard walks you through every field, one question at a time.

6

Why it matters

  • A bad Cost-to-Complete hides losses. If you lowball CTC, the report looks fine while the job quietly bleeds — leadership only finds out at closeout, when it's too late to fix.
  • Profit fade compounds. Small monthly cost creep erodes margin; the WIP is the earliest place to see it and pursue change orders.
  • Over/under billing is a real balance-sheet entry. Overbilled cash isn't profit — it's a liability you still owe work against. Underbilled means you've earned more than you've invoiced — an asset you should bill for.
  • It keeps the company bondable. Clean, accurate WIPs protect bonding capacity and bank credit — which determines how much work the company can win.
★

Key terms cheat-sheet

GAAP
Generally Accepted Accounting Principles — the U.S. accounting rules. For construction, revenue is recognized by percentage-of-completion.
Percentage-of-completion
Recognizing revenue in proportion to cost incurred, so revenue tracks actual progress — not invoicing.
Cost to Complete (CTC)
The PM's forecast of remaining cost to finish. The single most important input on the WIP.
Earned Revenue
% Complete × Contract Price — the revenue you've actually earned to date.
Overbilled / Billings in Excess
Billed more than earned. A liability — you owe work against that cash.
Underbilled / Costs in Excess
Earned more than billed. An asset — revenue you've earned but not yet invoiced.
Profit Fade
Margin shrinking over time as the revised cost estimate climbs above the original budget.
COR
Change Order Request — added scope. Only approved CORs raise the contract price.
Retention
A percentage (usually 5–10%) the client holds back from each payment until the job is complete.

1. Interactive WIP Table Explorer

Hover over headers or cell values to see equations, who owns the data, and why the metric determines your success.

Accounting Data PM Controlled Calculated Field
PM Customer / Project Sage Job# Contract Price
with Changes		 Estimated
Costs		 Total Billed
with Retention		 Total Cost
to Date		 Utilization % Costs to
Complete		 Revised
Cost Estimate		 GAAP
Over/Under Billed		 GM % Start
Date		 Completion
Date		 Left
to Bill		 Outstanding
CORs		 Approved
CORs
CO R-Collins-Repair Mather 53617 $776,238.00 $604,627.34 $755,457.75 $516,544.63 85.43% $475,889.31 $992,433.94 ($351,442.41) -27.85% 11/06/24 06/15/25 $20,780.25 - $487,248.00
TOTAL - - $776,238.00 $604,627.34 $755,457.75 $516,544.63 - $475,889.31 $992,433.94 ($351,442.41) -27.85% - - $20,780.25 - $487,248.00
PM CONTROLLED

Costs to Complete (CTC)

DEFINITION

The Project Manager's field-validated estimate of the remaining direct costs needed to fully complete all scope items.

CALCULATION / SOURCE

Total Cost to Date + Costs to Complete

WHY IT MATTERS

An inaccurate CTC blinds executive leadership to massive project losses until it is too late.

STEP 1 OF 7

Meet the Project: R-Collins-Repair Mather

CF

Chief Financial Officer

Corporate Finance

Welcome to the WIP simulator! You are the PM on Sage Job #53617: a repair job for R-Collins with a contract price of $776,238.00. Originally, estimators forecasted this would cost $604,627.34 to complete. That means you started with a healthy 22.1% Gross Margin. Let's look at the WIP report at mid-project.

Active Project WIP Preview (Job #53617)

LIVE PREVIEW
Contract Price Est. Costs Total Billed Cost to Date Costs to Complete Revised Cost GAAP O/U GM % Approved CORs
$776,238.00 $604,627.34 $755,457.75 $516,544.63 $88,082.71 $604,627.34 ($92,317.62) 22.11% $487,248.00

Financial Impact Visualizer

WIP Project Sandbox

Change the values below to model your own construction projects, experiment with margins, and see the exact mathematical mechanics of over/under billings.

Contract & Invoicing

$
$

Cost Baseline & Actuals

$
$

The PM Forecast INPUT

$
💡 What is the remaining direct cost to finish all field activities?
Revised Cost Estimate $992,434 +$387,807 vs. original budget
Percent Complete (Earned) 52.05% Budget Utilization: 85.43%
Earned Revenue $404,015 Billed: $755,458

Real-time Project Health Indicators

Gross Margin Speedometer
-27.85% CRITICAL LOSS
GAAP Over/Under Billing
EARNED BILLED
$351,442 OVERBILLED (Liability)
Warning: Severe Budget Overrun

Your revised costs ($992,434.00) exceed your original contract value ($776,238.00). You are working at a -27.85% loss. You are currently $351,442.00 Overbilled, meaning you have cash on hand but you lack the billing room left to cover the costs required to actually complete the scope. You must immediately pursue a scope Change Order (COR) or review your field productivity!

Are you ready to become a WIP Master?

Test your knowledge on real-world Project Management scenarios. Score 80% or higher to earn your **Official WIP Academy Certificate**!

WIP Wizard: Project 1 · Step 1 of 10

Who is the Project Manager?

Accounting needs to know who is responsible for this job. Enter your initials (e.g. CO).