Contractor Finance Glossary
What is Work in Progress (WIP) Schedule?
Definition reviewed .
Also called: WIP schedule, WIP report
A WIP schedule is a job-by-job report that compares how much of each contract you have earned (based on percentage of completion) against how much you have billed, revealing whether each job is overbilled or underbilled.
The WIP schedule is where contractor accounting and cash reality meet. For every open contract it lists contract value, cost to date, estimated cost to complete, percent complete, revenue earned, and amount billed. The gap between earned and billed is the story.
Underbilling can reflect earned work not yet billed, but it can also signal a stale cost estimate or a billing restriction. Overbilling means billings exceed recognized revenue; it does not prove cash has been collected. Compare the WIP position with invoice aging, cash receipts and remaining costs.
Before chasing an underbilling, refresh the estimated cost to complete and inspect pending change requests. A persistent gap calls for a re-estimate and contract review before a bigger invoice. Cost-to-cost is one progress method, not a universal rule; uninstalled materials, wasted costs and expected contract losses need treatment under the applicable reporting framework.
How it is calculated
For a qualifying contract using an adjusted cost-to-cost method: percent complete = eligible cost to date divided by current eligible total estimated cost; earned revenue = transaction price times percent complete. Underbilling = max(earned revenue minus cumulative billings, 0); overbilling = max(cumulative billings minus earned revenue, 0). Contract asset/liability presentation also depends on enforceable payment rights and the reporting framework.
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