Oceangate Funding Group, a small-business funding broker in Ogden, Utah, explains construction WIP schedules: a job-by-job report comparing earned revenue with amounts billed. Billing more than earned is over-billing, a liability; billing less is under-billing, an asset that ties up cash. Lenders and sureties use the schedule to judge margins, estimating accuracy and cash flow.
| What it is | A job-by-job report of contract value, costs, progress and billing |
|---|---|
| Key output | Over-billing or under-billing on each open job |
| Common method | Percentage of completion, measured by cost incurred against estimated total cost |
| Who asks | Lenders, sureties and the contractor's own accountant |
| Weber County context | 1,042 construction employers, the county's largest sector by count (CBP 2023) |
What a WIP schedule shows
Each open job gets a row. The usual columns are:
- Contract value, including approved change orders.
- Estimated total cost to complete the job, revised as the job progresses.
- Cost to date, everything spent on the job so far.
- Percent complete, usually cost to date divided by estimated total cost.
- Earned revenue, the contract value multiplied by percent complete.
- Billed to date, everything invoiced to the customer so far.
- Over- or under-billing, billed to date minus earned revenue.
Many schedules also show estimated gross profit, the margin originally bid and how it has moved, and retainage held back by the customer.
Over billing and under billing in construction
If a contractor has billed more than it has earned, the job is over-billed. That cash belongs, in effect, to work not yet done, so accountants record it as a liability. Moderate over-billing is common and often healthy: the contractor is funding the job with the customer's money. If a contractor has billed less than it has earned, the job is under-billed, recorded as an asset. Under-billing means the contractor is funding the job itself, and persistent under-billing can signal billing delays, unapproved change orders or a job running over its estimate.
So what does over/under billing mean for cash? Over-billing brings cash in early; under-billing delays it. A contractor with large under-billings across several jobs can be profitable on paper and still short of cash for payroll.
A construction WIP schedule example
Hypothetical figures for two jobs, chosen only to show the arithmetic:
| Job A: tenant improvement | Job B: site work | |
|---|---|---|
| Contract value | $400,000 | $250,000 |
| Estimated total cost | $320,000 | $210,000 |
| Cost to date | $160,000 | $147,000 |
| Percent complete | 50.0 percent | 70.0 percent |
| Earned revenue | $200,000 | $175,000 |
| Billed to date | $230,000 | $140,000 |
| Over (under) billing | $30,000 over | ($35,000) under |
Job A has billed $30,000 more than it has earned: cash is ahead of the work. Job B has billed $35,000 less than it has earned: the contractor has paid for work it has not yet invoiced. Combined, the contractor is $5,000 under-billed, which looks small, but Job B on its own is the kind of gap that leads to a request for working capital. These figures are illustrative only.
Why lenders and sureties ask for it
- Estimating accuracy. If estimated costs keep rising, margins are shrinking and the bid process may be off.
- Cash position. Under-billings tie up cash; over-billings may be cash already spent.
- Backlog. The remaining value of signed work shows how much revenue is coming.
- Fade or gain. Comparing current estimated profit with the profit at bid shows whether jobs are getting better or worse as they progress.
For a contractor line of credit, a partner may review the WIP schedule alongside receivables to judge how much it is comfortable advancing. A surety reviews it before writing bonds.
Keeping a WIP schedule useful
- Update estimated costs to complete every month, not just at bid.
- Record change orders only when approved, or show pending ones separately.
- Reconcile cost to date with the general ledger.
- Bill promptly on every billing cycle; under-billing is often just late invoicing.
- Show retainage separately, since it is earned but not yet collectible.
Your accountant may follow a specific revenue recognition method; the schedule should follow it consistently.
How the schedule connects to a contractor line of credit
A contractor line of credit is usually drawn to carry labor and materials on open jobs and repaid as billings are collected. That makes the WIP schedule the natural document for sizing it. Under-billings show cash the business has already spent on work it has not yet invoiced; receivables show cash invoiced but not yet collected; together they describe how much the line is really carrying. A partner comparing the line's balance with those two figures can see whether draws are funding real work in progress or covering losses on jobs that have faded.
Keeping the schedule current also helps at renewal or review time, because it shows how the business performed against its own estimates since the line was opened.
WIP schedules for Weber County, UT contractors
Construction is Weber County's largest sector by number of employers, with 1,042 employer establishments in 2023, 723 of them specialty trade contractors (U.S. Census Bureau, County Business Patterns 2023). Many are small firms without a controller, and a simple, current WIP schedule is one of the most persuasive documents such a firm can bring to a funding conversation. Contractor financing covers the structures, and more guides are in the guide library.
By Oceangate Funding Group · Updated