Understanding Work-in-Progress (WIP) Reports in Construction Accounting

If you're in construction and the words “Work-in-Progress Report” make your eyes glaze over, you're not alone. But understanding how to read and use a work in progress report in construction accounting can be a game-changer. These reports aren’t just financial paperwork—they’re powerful tools that show where your jobs stand, how your cash flow looks, and whether you’re on track to make a profit. Whether you’re a contractor, project manager, or just curious about your numbers, WIP reports can offer clarity—if you know what to look for.

So, what is a WIP report? A WIP report shows you where each job stands financially. It compares what you’ve billed to what you’ve earned, based on how far along the job actually is. If you’ve billed more than you’ve earned, you’re overbilled, which can help with cash flow, but might signal a future slowdown if your costs catch up. If you’ve earned more than you’ve billed, you’re underbilled, which means you're doing the work but haven’t collected the money yet.

These reports help you:

• Understand job profitability in real time

• Forecast cash flow more accurately

• Catch underbilling before it becomes a problem

• Build trust with lenders, GCs, and bonding agencies

• Prepare for year-end financials or CPA reviews

For WIP reports to be useful, your books need to be accurate, up-to-date, and organized by job. That includes labor, materials, subs, retainage, and overhead—tracked consistently and reviewed monthly.

How I Can Help

I’m a Portland-based bookkeeper with 15+ years of experience, and I specialize in construction accounting for small businesses. I help contractors move from “I think we’re doing okay” to actually knowing which jobs are profitable, which ones are drifting off course, and what needs to happen next. WIP reporting is part of the full bookkeeping package I offer—along with job costing, payroll, reconciliations, and clean financials at month-end.

If you’re ready to get a better handle on your projects and cash flow, I’d be glad to help. Book a consult or learn more about my services here.