They needed a line on the balance sheet for work performed but not yet billable. They deliberately did not call it underbillings, because their bank would have asked for something they were not ready to produce.
Key Takeaways
- Work you have performed but cannot invoice yet is not a receivable, and putting it there inflates a number nobody can collect.
- The words you use on the balance sheet determine what your lender asks for next.
- A WIP schedule built on percent-complete revenue with no matching cost will make one month look good and the next look broken.
- You cannot produce a defensible WIP schedule until you know which costs belong to which job in which month.
What Is a Construction WIP Schedule and What Goes on It?
A work in progress schedule reconciles what you have earned on open jobs against what you have billed for them, job by job. It carries contract value, cost incurred to date, estimated cost to complete, percent complete, revenue earned, amount billed, and the resulting over or under billing.
The core of it is one comparison: revenue earned versus revenue billed. When you have earned more than you have billed, you are underbilled and cash is behind the work. When you have billed more than you have earned, you are overbilled and cash is ahead of it. Both are normal. Neither is safe to ignore.
The reason contractors build it in a spreadsheet rather than pulling it from accounting is that the cost-to-complete estimate is a judgment made by the person running the job, not a number the ledger holds. That judgment has to be collected from operations every month, which is why the schedule tends to break at the operations end rather than the accounting end.
Why Does It Matter What You Name the Line?
Because your lender reads the balance sheet and the vocabulary triggers expectations. A specialty contractor doing close to $29M needed a balance sheet line for work performed daily against contracts that could only be invoiced through pay applications on the 20th. They chose the name unbilled revenue rather than underbillings.
The reasoning was explicit. Calling it underbillings would have signalled to their bank that a full WIP schedule existed and could be requested, and they were not yet in a position to produce one they would stand behind. So they named the line for what it was, kept the accounting correct, and did the WIP work on their own timeline rather than the bank's.
That is not evasion, and it is worth being clear about why. The dollars were recorded accurately either way. What changed was whether an external party would ask for a document the company could not yet defend. Sequencing a lender conversation is a legitimate part of financial leadership.
Take the Financial Control Score Quiz
7 questions. About a minute. See where your business actually stands.
What Happens When Work Performed Sits in Accounts Receivable?
You get a receivables balance that cannot be collected and a cash forecast built on top of it. The same contractor had invoices entered as work was completed but not yet sent, sitting in accounts receivable the whole time.
The correction is straightforward once seen. Work performed and not yet billable becomes accrued revenue on the balance sheet. A receivable is created only when the pay application actually goes out. Anything else means your aging report includes work no customer has been asked to pay for.
The scale of what this can hide is easy to underestimate. A service contractor doing $7M to $7.5M found unbilled labor running between 9,000 and 12,000 hours a year. At their $75 hourly rate, the low end is about $675,000 of performed work that never became an invoice at all, which is the same failure one step further along.
Why Does Percent-Complete Revenue Break the Schedule?
Because revenue recognized without its matching cost makes the percentage meaningless. A development and construction group we work with had a percent-complete line adding $454,000 of income with no attributable expense against it.
A WIP schedule built from that will show jobs as more complete and more profitable than they are, and the correction arrives later as a swing nobody expected. The month carrying the unmatched revenue reads strong; the month absorbing the cost reads weak; and both are artifacts.
That same group also had roughly $64,000 of retainage recorded on the wrong entity, and a bookkeeper entering costs retroactively into closed months, which at one point left the books off by $160,000. A spreadsheet cannot compensate for any of that. The WIP schedule is only as good as the cost data feeding it, which is why our fractional CFO for construction companies work usually corrects attribution before anyone builds the schedule.
How Do You Get a WIP Schedule Your Bank Will Accept?
Make the cost data right, collect cost-to-complete from operations on a fixed monthly rhythm, and be willing to show the schedule to someone before you need to. The document is a byproduct of the process, not a substitute for it.
The $29M contractor got there in a specific order: reconcile material usage back through the year, move unused purchases to inventory, allocate the payroll that had landed on no job, book depreciation monthly instead of annually, then produce job profitability with monthly and year-to-date tabs. The result reconciled to the underlying job records within about $136, and their bonding company accepted it at year end.
That order is the point. A WIP schedule assembled in a spreadsheet on top of unreconciled cost is a formatting exercise. The same spreadsheet on top of clean attribution is a document that holds up under someone else's questions, which is the only test that matters.
What Does Your Lender Actually Do With This?
They test whether your reporting is consistent, and consistency matters more to them than any single figure. A schedule that changes shape every quarter reads as a company that does not know its own numbers, regardless of what the numbers say.
The specialty contractor above was late on a bonding statement that had never been submitted from the prior winter, and sent it in the bonding company's own format rather than reformatting it into theirs. They also committed to producing a job costing and profitability report by year end and delivered it, and it was accepted. The document mattered less than the fact that it arrived when promised and in the expected shape.
The naming decision sits inside that same logic. Choosing unbilled revenue over underbillings was not about hiding anything, because the dollars were identical either way. It was about not inviting a request for a WIP schedule during the window when the underlying cost data was still being reconciled. Once the reconciliation was done, the schedule became something they could show.
The practical lesson for any contractor approaching a lender or a bonding conversation is to sequence it. Get the cost attribution right, produce the schedule internally for two or three months until it stops moving, and only then put it in front of someone whose job is to find the inconsistency. A schedule shown too early does not just fail once. It sets an expectation you then have to climb back from.
Your Next Step
Before You Build the Schedule, Find Out Whether the Cost Data Deserves One
A WIP schedule is the last step, not the first. If material is expensed on purchase and payroll is landing on no job, the spreadsheet will simply present the problem more neatly. The Financial Control Score Quiz scores cash visibility in about a minute.
Common Questions
Frequently Asked Questions
What Is a WIP Schedule in Construction?
A work in progress schedule reconciles revenue earned against revenue billed on every open job, using contract value, cost to date, estimated cost to complete, and percent complete. The result shows whether each job is overbilled or underbilled, and by how much.
What Is the Difference Between Underbillings and Unbilled Revenue?
Underbillings is a WIP schedule term signalling that earned revenue exceeds billings on a job. Unbilled revenue is a broader balance sheet description for performed work not yet invoiceable. One contractor chose the second deliberately so their lender would not request a WIP schedule prematurely.
Why Are WIP Reports Inaccurate in Construction?
Usually because cost-to-complete estimates come from operations and are stale, because material was expensed at purchase rather than consumption, or because revenue was recognized on percent-complete without matching cost. The schedule inherits every attribution problem upstream of it.
Should Work Performed but Not Yet Billable Go in Accounts Receivable?
No. It should sit as accrued or unbilled revenue on the balance sheet until an invoice or pay application actually goes out. Recording it as a receivable inflates the aging report with amounts no customer has been asked to pay.
Can You Build a WIP Schedule in Excel?
Yes, and most contractors do, because cost-to-complete is an operational judgment rather than a ledger value. The spreadsheet is not the constraint. Whether the underlying cost is attached to the right job in the right period is.
![](/wp-content/uploads/2025/12/Facebook.png")
