Calculator
Construction WIP Calculator: Over and Under Billings
Enter contract value, estimated cost, cost to date, and billings to date. Get percent complete, earned revenue, and whether the job is overbilled or underbilled.
Results
- Percent complete (cost-to-cost)
- 60.0%
- Estimated gross profit at completion
- $200,000
- Earned revenue to date
- $750,000
- Gross profit earned to date
- $120,000
- Overbilled (liability)
- $40,000
- Cost to complete
- $420,000
Billings in excess of costs and estimated earnings.
Remaining billing $460,000
Illustrative only. Uses the cost-to-cost percentage-of-completion method for a single job. Confirm treatment with your CPA.
A work-in-progress schedule is the single most important report a contractor produces and the one most often done wrong. It converts what you have spent and what you have billed into what you have earned, and the difference between billed and earned is either a liability (overbilled) or an asset (underbilled) that changes your balance sheet and your bonding capacity.
This calculator runs the cost-to-cost percentage-of-completion method for one job. Run it for each job, add them up, and you have the schedule. If the underbillings are large, ask why before your surety does.
How to read the result
- Percent complete equals cost to date divided by total estimated cost.
- Earned revenue equals contract value times percent complete.
- Overbilled (billings in excess of costs and estimated earnings) is a liability. Underbilled (costs and estimated earnings in excess of billings) is an asset.
- Estimated gross profit at completion equals contract value minus total estimated cost. If the estimate moves, everything moves.
FAQ
Questions about this calculator
What if the job is projected to lose money?
Under generally accepted accounting principles the entire projected loss is recognized immediately, not spread over the remaining work. This calculator flags a projected loss and shows the full loss provision.
Should I include change orders?
Approved change orders belong in contract value and estimated cost. Unapproved ones are a judgment call that your CPA and surety will ask about; the conservative approach is to include the cost and exclude the revenue until approved.
Why does my surety care about underbillings?
Large underbillings usually mean one of three things: slow billing, an inflated estimate of profit, or unapproved change orders being counted as earned. Each one is a reason to worry about the job.
Keep reading
From the number to the decision
The service that acts on this result, the articles that explain it, and the industries where it matters most.
Services
- Construction CFO & ControllerFinance leadership for contractors between $3M and $50M: the WIP schedule, the job-cost system, the change-order log, the surety package, and the weekly cash forecast, run by a CFO who has done it inside construction companies.
- General ContractorsA fractional CFO and Controller who run the pay app calendar, the WIP schedule, and the cash forecast for your GC business, so the numbers your surety and your bank read are numbers you already knew.
- Electrical ContractorsFinance leadership built for the electrical trade: material price exposure priced into every bid, stored materials billed the month they land, and a service division that reports its own margin.
Insights
- How to Calculate WIP for a Construction CompanyThe WIP schedule is the one report that tells a contractor the truth about every open job. Here is how to build it, line by line, with the formulas, a full worked schedule, and the mistakes that make bonding agents nervous.
- How Much Working Capital Should a Contractor Have?Your surety, your bank, and your payroll all draw on the same number, and none of them compute it the way your bookkeeper does. Here is how to define it, how to set a target, and which levers move it without a capital contribution.
Industries
- ConstructionJob costing the field trusts, a WIP schedule your bonding agent believes, and a cash forecast that sees the payroll before it leaves. Finance leadership for contractors doing $3M to $50M.
- General ContractorsMost of the money on a general contractor's income statement belongs to someone else. Finance leadership that keeps the pass-through moving, protects the fee, and gets the surety what it needs before it asks.
- HVACService and replacement are two businesses sharing a truck. Finance leadership that reports them separately, forecasts the shoulder season, and turns ServiceTitan data into numbers a lender or buyer will believe.
Calculators
- Full-Time vs. Fractional CFO Cost CalculatorSalary is the smallest part of what a CFO costs. Put in the real numbers and compare them with a fractional engagement sized to your company.
- Working Capital CalculatorWorking capital is the money the business needs to run between the day you spend and the day you get paid. Here is how much you have, and how much you need.
- Gross Margin CalculatorMargin and markup are not the same number, and confusing them is the most expensive arithmetic mistake in the trades. This calculator keeps them straight.
Financial assessment
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