QuickBooks Online Advanced job costing: Tie Out Contract Value, Cost to Date, and Billings Before You Retire the WIP Spreadsheet
QuickBooks Online Advanced job costing now shows budget versus actual and a work in progress view while a job is still open. Before that view replaces your WIP spreadsheet, tie out three numbers it depends on: contract value including accepted change orders, cost to date including accruals and commitments, and billings to date including retainage.
Why this matters now
On 2026-10-26 Intuit published its Fall 2026 release notes for QuickBooks, which describe the QuickBooks Online Advanced construction features as "budget-vs-actual and WIP visible while a job is still open," "change orders that update costs and invoices together," and "AIA-style progress billing tied to project milestones," with a footnote that feature release dates vary by product and "not all features will be available on October 26, 2026." The QuickBooks Online Advanced Fall 2026 page adds that construction financials shipped in August, that hours logged in QuickBooks Workforce flow straight into job costs, and that labor costing by service item is coming soon. The next day, 2026-10-27, Intuit's Intuit Connect press release named industry-specific editions for construction in both QuickBooks Online Advanced and Intuit Enterprise Suite, rolling out to U.S. businesses starting that day.
The product documentation is more precise about what the reports contain. Intuit's help article on project reports, updated 2026-08-05, lists a Work in progress report that shows "the percentage of what you spent so far vs. your estimate," an Estimate and progress invoicing report that shows "the percentage of what you've earned so far vs. your estimate," and separate Cost to complete, Committed cost, Change order, and Unallocated project amounts reports. The help article on project phases, updated 2026-08-04, says the Estimate vs. Actuals and WIP reports can be filtered by phase and that phase-based invoicing is AIA-style.
Coverage of the release so far explains the features, who gets them, and what the add-on costs. It doesn't explain the accounting question a contractor faces in November: when the app shows a job at 60 percent complete, is that the number that goes on the WIP schedule the bank and the surety will read? Usually it isn't, and the gap isn't a software defect. It is three tie-outs nobody has run yet. This article is those tie-outs, with one job worked through end to end.
What the in-app view measures and what a WIP schedule needs
A self-contained definition first. A construction WIP schedule, for a fixed-price job on the cost-to-cost method, needs six inputs per job: revised contract value, cost to date, estimated cost to complete, percent complete, revenue earned to date, and billings to date. Percent complete is cost to date divided by the sum of cost to date and estimated cost to complete. Revenue earned is revised contract value times percent complete. Billings above revenue earned are a liability, billings in excess of costs and estimated earnings. Billings below it are an asset, costs and estimated earnings in excess of billings.
Now compare that to what the documentation says the app computes. "The percentage of what you spent so far vs. your estimate" is cost to date divided by the estimate. That equals the cost-to-cost percent only while the estimate still equals the expected cost at completion. The moment a job runs over, the estimate is too low, the denominator is too small, and percent complete is overstated. Revenue earned follows it up, and so does gross profit to date. The Change order and Cost to complete reports exist to help you keep the estimate current, but they are reports, not controls. Someone has to decide, every month, what the job will cost to finish.
The second difference is in cost to date. The app's cost to date is what has posted to the project: bills, expenses, checks, and payroll that carried the project tag. Costs that haven't posted yet aren't in it. The documentation gives you a Committed cost by project report for open purchase orders and an Unallocated project amounts report for transactions that reached the books without a project. Labor for the last week of the month usually sits in neither, because payroll hasn't run. The payroll-to-job-cost tie-out covers that accrual in detail.
The third difference is in billings. An AIA-style progress invoice carries contract value, invoiced to date, the current draw, and the balance to finish. Retainage withheld by the owner is still billed revenue for WIP purposes and still a receivable, just one that isn't yet due. If your file records retainage as a negative line or in a separate receivable account, the WIP schedule needs gross billings, not the net amount the customer was asked to pay this month.
| WIP input | Where the app shows it | What it must tie to | A difference usually means |
|---|---|---|---|
| Revised contract value | Project estimate plus accepted change orders; Change order report | Signed contract and executed change orders in the job file | A change order was sent but never accepted, or an accepted one was never entered |
| Cost to date | Actual costs report; Profit and loss by project | Job cost accounts in the general ledger for the period, plus month-end accruals | Unallocated transactions, costs on the wrong project, or unaccrued labor |
| Committed cost | Committed cost by project report | Open purchase orders and subcontracts | A purchase order was received but the bill was not entered, or the reverse |
| Estimated cost to complete | Cost to complete by project report | The project manager's current estimate, dated and signed | The estimate was never updated after the overrun showed up |
| Billings to date | Estimate and progress invoicing report; invoiced to date on the AIA-style invoice | Invoices posted by project in the ledger, gross of retainage | Retainage recorded as a reduction of revenue, or a draw posted without the project |
| Retainage receivable | Separate line or account, depending on setup | Owner's statement of retainage held | Retainage released but not reclassified, or withheld at the wrong rate |
One contractor's October tie-out, job by job
Ridgeline Mechanical is a mechanical contractor with eleven field employees, on QuickBooks Online Advanced with the construction features turned on, five open fixed-price jobs, and a bank line that requires a quarterly WIP schedule. The numbers are illustrative. The job that matters this month is the Hollis Street clinic retrofit, and the controller runs the three tie-outs on it before touching the other four.
Contract value: $516,000, not $528,000
The project was set up from a $480,000 estimate with $400,000 of estimated cost. Change order one, for $36,000 of added ductwork at $30,000 of cost, was accepted by the owner in September and entered on the project, so the app shows a revised contract value of $516,000 and a revised estimate of $430,000. Change order two, for $12,000 of controls work, was sent on October 20 and hasn't been accepted. The project manager has already ordered the controls. The Change order report shows it as pending, which is right, and the controller leaves it out of contract value. Including it would add $12,000 to the top of the WIP calculation for work the owner hasn't agreed to pay for. The signed contract and the executed change order in the job file agree to $516,000, so the first tie-out closes.
Cost to date: $264,200, not $258,000
The Actual costs report shows $258,000 posted to the job through October 31. The Unallocated project amounts report shows one $3,400 subcontractor bill with no project, which the controller traces to Hollis Street and reallocates, bringing posted cost to $261,400. Payroll for the week of October 26 runs on November 5 and carries $2,800 of Hollis Street labor and burden, so the controller books an accrual: debit job labor cost on the project, credit accrued wages, reversing November 1. Cost to date is $264,200. The Committed cost by project report shows $14,500 of open purchase orders, including the controls. Those aren't cost to date. They are part of the cost to complete, and the controller keeps them on a separate line so nobody counts them twice.
Cost to complete and percent complete
The Cost to complete report projects a final number from current data. The controller treats it as a prompt, not an answer, and asks the project manager for a current estimate to complete, line by line, including the $14,500 already committed. The answer is $190,000. Estimated cost at completion is therefore $264,200 plus $190,000, or $454,200, against a revised estimate of $430,000. The job is $24,200 over, and expected gross profit has fallen from $86,000 to $61,800. Percent complete on the cost-to-cost method is $264,200 divided by $454,200, or 58.2 percent. The in-app view, which divides $258,000 of posted cost by the $430,000 estimate, reads 60.0 percent. Both numbers are arithmetic. Only one of them uses the cost the job will actually incur. The re-estimation walkthrough covers how to build that estimate to complete when input prices move.
Billings and the over billing
Three AIA-style draws have gone out, for $100,000, $110,000, and $120,000, a total of $330,000 gross. The owner withholds 10 percent retainage, so $33,000 of that is retainage receivable, reclassified out of accounts receivable, and $297,000 was due on normal terms. Billings to date for the WIP schedule are $330,000, gross. Revenue earned to date is $516,000 times 58.2 percent, or $300,147. Billings exceed revenue earned by $29,853, so the job is over billed by that amount at October 31, and the controller books the month-end entry: debit contract revenue $29,853, credit billings in excess of costs and estimated earnings $29,853, reversing November 1. On the app's 60.0 percent, revenue earned would be $309,600 and the over billing $20,400.
What the two views say about October gross profit
Gross profit to date on the WIP basis is $300,147 of revenue earned less $264,200 of cost, or $35,947. On the in-app view it is $309,600 less $258,000, or $51,600. The difference of $15,653 is profit the job hasn't earned: $6,200 of cost that hadn't posted and $9,453 of revenue that an out-of-date estimate pulled forward. Multiply that across five open jobs and the October package the bank receives is a different document. The WIP schedule guide lays out the full schedule format once each job has been through these three tie-outs.
Accounting controls for the job cost tie-out
Source data: the signed contract and every executed change order; the Change order report with status; the Actual costs, Committed cost, Unallocated project amounts, and Cost to complete reports as of month-end; the general ledger detail for job cost accounts for the period; the payroll register and the dates of the last pay period; the three AIA-style invoices and the owner's statement of retainage held; and the project manager's written estimate to complete, dated and signed. Record which report and which run date each number came from, because project reports change as transactions are added after month-end.
Calculation: four deterministic equations anyone can re-perform from the same inputs. Revised contract value equals the original contract plus accepted change orders only. Cost to date equals posted project cost plus reallocated unallocated amounts plus the month-end labor accrual, with committed cost held separately. Percent complete equals cost to date divided by cost to date plus estimated cost to complete, and revenue earned equals revised contract value times that percent. Over or under billing equals gross billings to date less revenue earned. Keep polarity straight: an over billing is a credit-balance liability, an under billing is a debit-balance asset, and both are point-in-time balances at month-end, while cost to date, revenue earned, and billings are cumulative flows over the life of the job. Formula cells only. The estimate to complete is typed once, with a date, and everything else derives from it.
Review: someone other than the person who maintains the projects re-performs the three tie-outs for every job above a materiality floor, inspects the Change order report for anything pending that found its way into contract value, confirms the Unallocated project amounts report is empty at month-end, traces the labor accrual to the payroll register, agrees gross billings to the invoices and retainage to the owner's statement, and challenges any job whose estimate to complete hasn't changed since last quarter while its cost to date has. The reviewer also confirms that last month's over or under billing entry was reversed before this month's was booked.
Decision: the owner or controller decides the materiality floor, the burden rate used in labor cost, and whether a job with an expected loss is written down immediately, which the cost-to-cost method requires. The project manager owns the estimate to complete and signs it. The controller owns the WIP schedule and the over and under billing entries. The decision to retire the WIP spreadsheet is made per job, after three consecutive months in which the app's inputs tied to the schedule without adjustment, and it is recorded with the date.
Limits and common mistakes
Intuit's Fall 2026 notes say feature release dates vary by product and that not all features were available on October 26, 2026. Labor costing by service item is listed as coming soon, and the AIA-style invoices are formatted for typical general contractor and lender needs rather than certified by the American Institute of Architects. Nothing above describes report behavior beyond what Intuit has documented, and your file may show different columns depending on edition and rollout. Run the tie-outs against what your reports actually contain.
The first mistake is reading the in-app percent as the cost-to-cost percent. They agree only when the estimate equals the expected cost at completion. On a job that is running over, the app's number is higher, and gross profit to date is overstated until someone revises the estimate.
The second is counting committed cost as cost to date. A purchase order is a commitment, not a cost incurred, and it belongs in the estimate to complete. Counting it in both places overstates percent complete and understates the estimate to complete at the same time.
The third is netting retainage out of billings. Retainage withheld is billed revenue and a receivable not yet due. Netting it understates billings to date, and on a heavily retained job can turn a real over billing into an apparent under billing, which moves a liability to the asset side of the balance sheet.
The fourth is leaving the over or under billing entry in place and booking next month's on top of it. Reverse it on the first day of the following month and rebook from the new schedule. The balance is a point-in-time number and must be rebuilt, not accumulated. A WIP schedule layout with these equations built in is in the FinBoard templates library.
Frequently Asked Questions
Does QuickBooks Online Advanced job costing produce a WIP schedule?
It produces a Work in progress report that, according to Intuit's help documentation updated August 5, 2026, shows the percentage of what you spent so far against your estimate, plus separate cost to complete, committed cost, and change order reports. A WIP schedule with revenue earned and over or under billings still needs a current estimate at completion and a month-end calculation, whether that happens in the app, a spreadsheet, or a reporting tool.
Why is the app's percent complete different from my WIP schedule?
The app divides cost to date by the estimate. The cost-to-cost method divides cost to date by cost to date plus the estimated cost to complete. The two agree only when the estimate equals the expected cost at completion. On a job that is running over, the app's percent is higher than the WIP percent until the estimate is revised.
Should pending change orders be included in contract value?
No. Include only change orders the customer has accepted and that have been entered on the project. Intuit's documentation says an accepted change order updates the project's estimated cost and income, so the project's revised value should match the executed change orders in the job file. Pending change orders belong in a note on the WIP schedule, not in the contract value.
How does retainage affect billings to date on the WIP schedule?
Billings to date should be gross of retainage. Retainage withheld by the owner is revenue already billed and a receivable that is not yet due, so it is reclassified from accounts receivable to a retainage receivable account rather than deducted from billings. Deducting it understates billings and can turn an over billing into an apparent under billing.
What is the journal entry for an over billing?
At month-end, debit contract revenue and credit billings in excess of costs and estimated earnings, a current liability, for the amount by which billings to date exceed revenue earned to date. Reverse the entry on the first day of the next month and rebook it from the new WIP schedule. An under billing is the mirror image: debit costs and estimated earnings in excess of billings, a current asset, and credit contract revenue.
Once each job's contract value, cost to date, and billings tie, the WIP schedule becomes a report that can be rebuilt every month rather than a spreadsheet that has to be reconstructed. FinBoard reads project and class detail from the QuickBooks Online ledger into one reporting view, so revenue earned, over and under billings, and gross profit by job can be traced back to the invoices, bills, and payroll behind them. See how FinBoard turns the monthly WIP tie-out into a drillable report.
