What Is a WIP Schedule
(and Why Your Banker Wants One)?
A WIP schedule compares the work you've completed to the work you've billed — revealing over- and underbilling and the true profit on jobs in progress. Here's what it is, how to read it, and why lenders ask.
Quick answer
A WIP (work-in-progress) schedule is a report that compares, job by job, how much of the work you've actually completed against how much you've billed. If you've billed more than you've earned, you're overbilled (that cash isn't really yours yet). If you've billed less, you're underbilled (you're financing the customer). It shows the true profit on jobs still in progress — and it's one of the first reports a sharp banker or surety asks to see.
If you bid and bill jobs over weeks or months — construction, trades, anything that runs long — your P&L alone will lie to you. It can show a great month because you billed a big draw, or a terrible one because you're behind on invoicing, while the actual work tells a completely different story. The WIP schedule is how you line the two up.
By Carrie Anderson
Co-Founder, 406 Consulting Group
Commercial banker and underwriter — 300+ loan files reviewed firsthand.
General guidance, not advice for your specific situation.
Prefer to watch?
What's actually on it
For each open job, a WIP schedule lays out a few numbers side by side:
- Contract amount. The total you'll bill for the job.
- Estimated total cost & cost to date. What you expected the job to cost, and what you've spent so far.
- Percent complete. Usually cost-to-date ÷ estimated total cost — how far along the work really is.
- Earned revenue. Percent complete × contract amount — what you've genuinely earned.
- Billed to date. What you've actually invoiced.
- Over / under billing. Earned minus billed. Billed more than earned = overbilled. Billed less = underbilled.
Why over/underbilling matters so much
Overbilled
You've billed ahead of the work. The cash feels good, but it isn't earned yet — spend it like profit and you'll come up short when the costs land. Chronic overbilling across jobs can mean you're funding the business on customers' money.
Underbilled
You've done work you haven't invoiced. That's real money sitting on the table — you're lending it to the customer for free. Underbilling is a quiet, common way for busy, profitable contractors to run short on cash.
Why your banker and surety want it
A lender or bonding company can't tell from your P&L whether your profit is real or borrowed from future billings. The WIP schedule can. It tells them whether your backlog is healthy, whether you're billing responsibly, and whether the profit you're reporting will actually show up. Walk into a loan or bonding conversation with a clean WIP schedule and you look like an operator who knows their numbers — which is exactly who gets the credit line and the bigger bonds.
Not sure your WIP tells the truth?
We build clean WIP and job-costing systems that keep you honest with yourself — and lender-ready — remotely.
FAQ
What does WIP stand for in construction?
WIP stands for work in progress (sometimes 'work in process'). A WIP schedule is a report that tracks your open jobs — comparing how much of each job is complete against how much you've billed — to show the true, earned profit on work that isn't finished yet.
How do you calculate percent complete?
The most common method is cost-to-date divided by estimated total cost (the 'cost-to-cost' method under percentage-of-completion). If you've spent $60,000 of an estimated $100,000 in cost, you're 60% complete, and you've earned 60% of the contract value — regardless of how much you've actually billed.
What's the difference between overbilling and underbilling?
Overbilling means you've invoiced more than you've earned to date — the extra cash is a liability, not profit. Underbilling means you've earned more than you've invoiced — it's an asset you haven't collected yet. A WIP schedule shows both, job by job, so you can fix underbilling and avoid spending overbilled cash you'll need later.
Do I need a WIP schedule for a small contracting business?
If you run jobs that span more than a billing cycle, yes — even a simple one. It's the single best way to know whether your profit is real or borrowed from future billings, and it's what a banker or surety will ask for when you want a credit line or a bond. 406 Consulting Group builds and maintains WIP schedules for construction and trades clients remotely.
In one line
A WIP schedule compares work earned to work billed — so you know if your profit is real or borrowed.
Keep Reading