Construction WIP Schedule: Build It From QuickBooks
A construction WIP schedule is the monthly workpaper that tells a contractor whether each active job is earning the margin the team expected, billing ahead of or behind that progress, and consuming more cash than the general ledger alone can show.
QuickBooks holds valuable pieces of the answer: posted job costs, invoices, accounts receivable, and project-level profitability. A complete construction WIP schedule adds the operational information that a ledger does not reliably hold by itself: the current contract value, approved change orders, estimated cost to complete, and a disciplined view of progress at period end.
That is why WIP is a controller process rather than a report to download. The work is to make sure the accounting data, project-manager estimates, and billing records agree before management, a lender, or a surety relies on the result.
The AICPA describes a WIP schedule as the place where a project's costs, requisitions, and revenue are brought together to calculate progress and financial performance. It also emphasizes monthly updates and conversations with project managers when the numbers do not align. Read the AICPA construction WIP guidance.
What a construction WIP schedule answers
A profit and loss statement can tell you whether the company made money last month. It cannot reliably tell you which open job is losing margin, which project is funding itself because billing is late, or whether the current estimate still supports the profit recognized to date.
A construction WIP schedule answers those questions job by job. At minimum, it should show:
- Current contract value: original contract price plus approved change orders and other contract adjustments that are appropriate to include.
- Estimated total cost: cost incurred to date plus the latest estimate to complete.
- Percent complete: a progress measure, often cost-to-cost when that is appropriate for the contract and accounting policy.
- Earned or recognized revenue: the amount supported by the selected progress measure and the applicable revenue-recognition analysis.
- Billings to date: invoices or requisitions issued through the close date.
- Over- or under-billing: the difference between billings and earned revenue.
- Estimated gross profit: contract value less estimated total cost, compared with the prior month's forecast.
In a recent construction reporting guide, Intuit makes the same practical point: job-level visibility is what exposes scope changes, material escalation, and unpriced change orders before they become a margin surprise. See Intuit's construction reporting overview.
The five inputs to collect from QuickBooks and operations
Start by locking a close date. Every input in the construction WIP schedule must refer to the same cutoff. If costs are current through August 31 but billings are current only through August 25, the schedule may look precise while actually comparing two different periods.
| Input | Primary owner | Typical source | Control question |
|---|---|---|---|
| Current contract value | Project manager and controller | Executed contract and approved change-order register | Are unapproved changes excluded or separately identified? |
| Costs incurred to date | Accounting | QuickBooks job-cost or project-cost detail | Do job costs reconcile to the ledger through the close date? |
| Estimated cost to complete | Project manager | Current estimate at completion or cost-to-complete forecast | Was the estimate refreshed after current labor, material, and subcontractor commitments? |
| Billings to date | Billing or accounting | QuickBooks invoices, progress billings, and receivable detail | Do credit memos, retainage, and cutoff adjustments agree to the billing register? |
| Progress measure | Controller and accounting policy owner | Contract analysis and project evidence | Is the selected method appropriate for this contract and consistently applied? |
QuickBooks data is strongest when each bill, time entry, purchase, and subcontractor cost is coded to the correct job and cost code before close. A flawless formula cannot repair costs that were posted to the wrong job, held in a clearing account, or entered after the reporting cutoff.
How to calculate a construction WIP schedule
The following example illustrates a common cost-to-cost management view. It is not a substitute for an ASC 606 contract assessment or a revenue-recognition policy.
Assume a contractor has an active project with a current contract value of $2,500,000. Costs incurred through month end are $900,000. The project manager's latest estimate to complete is also $900,000, making estimated total cost $1,800,000. Billings to date are $1,050,000.
| Calculation | Formula | Amount |
|---|---|---|
| Estimated total cost | Costs incurred + estimate to complete | $1,800,000 |
| Percent complete | $900,000 / $1,800,000 | 50% |
| Illustrative earned revenue | $2,500,000 x 50% | $1,250,000 |
| Illustrative earned gross profit | $1,250,000 - $900,000 | $350,000 |
| Estimated total gross profit | $2,500,000 - $1,800,000 | $700,000 |
| Underbilling | $1,250,000 earned revenue - $1,050,000 billings | $200,000 |
In this illustration, the job is 50% complete and has earned $1,250,000 under the selected cost-to-cost measure, but only $1,050,000 has been billed. The $200,000 gap is an underbilling. It may be a normal timing difference, but it may also mean the contractor is financing work before it can collect. Either way, it belongs on the controller's exception list.
Some teams present the same gap as billings less earned revenue. In that convention, underbilling appears as a negative value. The sign convention matters less than consistency: define it once, label it clearly, and make sure every reviewer reads the schedule the same way.
WIP supports revenue recognition, but it does not replace ASC 606 analysis
Construction teams often use the phrase percentage of completion as shorthand for a WIP calculation. The accounting conclusion is more nuanced. Under ASC 606, a contractor first determines whether a performance obligation is satisfied over time and then selects a method that faithfully depicts progress. The FASB's implementation examples include a construction company using a cost-incurred input measure where it appropriately measures progress. See the FASB construction-contract example.
That does not make cost-to-cost automatic. AICPA guidance notes that construction contracts may need careful treatment of uninstalled materials, rework, waste, variable consideration, and change-order modifications. Some contracts may not meet the over-time criteria at all. Review the AICPA's ASC 606 construction considerations.
The practical controller rule is simple: use the construction WIP schedule to organize evidence, identify changes in estimates, and reconcile the operational view to the books. Apply the company's approved accounting policy and consult the responsible CPA or technical-accounting advisor before recording revenue or balance-sheet adjustments.
A five-step monthly WIP close that catches profit fade early
1. Close the ledger and reconcile job costs
Run job-cost detail through the reporting date and reconcile the total to the relevant ledger accounts. Investigate material items in work-in-process, prepaid, accrued-cost, clearing, and suspense accounts that should be assigned to active jobs. Confirm that late vendor bills and payroll accruals have been considered consistently.
2. Refresh the project estimate, not just the actuals
The most dangerous number in a construction WIP schedule is usually not cost incurred. It is the stale estimate to complete. Ask the project manager to reforecast labor, committed subcontracts, material exposure, contingencies, and approved scope changes. Compare the new estimated total cost with the prior month and make the change visible.
When estimated total cost rises, estimated gross profit falls. If a job forecast moves from a $700,000 total margin to $400,000, the schedule should show both the revised estimate and the $300,000 profit fade. Do not let a favorable billing position hide a deteriorating forecast.
3. Validate contract value and change orders
Maintain a controlled contract register. Base contract, approved change orders, pending change orders, claims, and allowances should not be blended into one unsupported number. Pending work may matter operationally, but including it in earned revenue or margin without the appropriate accounting support can overstate the result.
4. Reconcile billings, retainage, and receivables
Agree billings in the construction WIP schedule to invoices and credit memos issued through the cutoff date. Separately identify retainage when it is material to cash planning or contract presentation. Then reconcile total billed and collected amounts to receivables, deposits, and cash-application records. This is where delayed requisitions and disputed invoices become visible.
5. Review exceptions before recording adjustments
Flag jobs with large underbillings, new overbillings, margin fade, negative estimated gross profit, major estimate revisions, or contract-value changes. A reviewer should see the reason, supporting documents, proposed action, and approval. The WIP adjustment, if any, should be traceable to the final reviewed workpaper rather than to an unexplained journal entry.
Five mistakes that make a WIP schedule unreliable
- Treating billings as revenue. A requisition is a cash-flow event. It does not, by itself, prove the revenue recognized under the contract accounting policy.
- Using a prior-month estimate to complete. Actual costs may be current while the estimate that drives margin is weeks old.
- Including unapproved change orders without disclosure. Keep pending changes visible, but do not quietly treat them as approved contract value.
- Mixing reporting cutoffs. Costs, billings, and estimates must use the same period end to be comparable.
- Skipping the ledger reconciliation. A job-level schedule cannot be trusted when it does not tie back to the accounting records.
When a spreadsheet is enough and when it is not
A controlled spreadsheet can be a sensible construction WIP schedule for a contractor with a limited number of active jobs, stable cost coding, and one person accountable for the close. It needs protected formulas, an input log, a documented review, and a monthly reconciliation to QuickBooks.
The process becomes harder when the group has many entities, project managers, locations, cost-code structures, or separate QuickBooks files. The risk is not merely copying a number incorrectly. It is using different mappings, cutoffs, and definitions across jobs so that no one can explain a consolidated result.
At that point, the goal is not to eliminate the WIP workpaper. It is to make the underlying job costs, billing data, entity mappings, and drill-down evidence easier to control. FinBoard helps multi-entity finance teams work from live QuickBooks data and investigate the transaction detail behind consolidated reporting. Learn more about FinBoard analytics and why multi-entity QuickBooks reporting often needs a dedicated reporting layer.
Use a repeatable workpaper every month
A construction WIP schedule becomes useful when it is prepared the same way every month: same close date, same contract register, same accounting policy, same sign convention, and a visible explanation for every material change. That repeatability turns it from a late close deliverable into an early-warning system for margin and cash.
To get started, download FinBoard's free Construction WIP Schedule Template. It gives your team a practical workpaper for contract value, cost-to-complete, earned revenue, and over- or under-billing review.
Frequently asked questions
What is a construction WIP schedule?
A construction WIP schedule is a job-level workpaper that compares contract value, estimated total cost, cost incurred, earned revenue, and billings to date. It helps a contractor monitor margin, cash exposure, and over- or under-billing on active projects.
Can QuickBooks Online create a WIP schedule?
QuickBooks can provide job-cost and billing data, but a complete construction WIP schedule also requires controlled contract values, approved changes, and current estimates to complete. Many teams use a controlled workpaper or connected reporting layer to combine and reconcile those inputs.
How often should a construction WIP schedule be updated?
A construction WIP schedule is commonly prepared monthly as part of the close. Teams with fast-moving jobs, tight liquidity, or significant bonding requirements may review job costs and estimate-to-complete changes more frequently.
What causes underbilling in construction?
Underbilling occurs when invoices issued to date are lower than the amount of revenue earned under the applicable contract accounting method. It can reflect normal timing, retainage, delayed requisitions, incomplete change orders, or a job that is funding its work before collection.
This article is general information and does not provide accounting, audit, tax, legal, or investment advice. Construction revenue recognition and contract presentation require a fact-specific analysis under the applicable accounting framework.
