The Work-in-Progress (WIP) report isn't just a document; it's the financial compass of every reputable contractor. It tells the story of your projects—not just what you've spent, but what you've actually earned. It’s the metric the banks, bonding companies, and ultimately, your management team rely on to assess financial health and implement the appropriate accounting adjustments for GAAP revenue recognition (i.e. making your numbers make sense!).
So, why does the process of generating an accurate WIP report feel like pulling teeth?
The Outsider Error: When Software Doesn’t Speak Construction
The core issue lies with the software built by outsiders. Developers without construction accounting experience see the WIP as a simple summation:
Revenue - Costs = Profit$$
If only it were that easy. For contractors, the critical question is timing—specifically, how to recognize revenue before a job is 100% complete, while accurately reflecting the percentage of work performed.
This is where most software fails. It lacks the inherent understanding of the Percentage of Completion Method and the critical adjustments needed for accurate reporting.
Three Ways Your Current WIP Report Is Hiding the Truth
If your current accounting system wasn't built by a construction accountant, it's almost certainly making one of these three common errors, which leads to your WIP report lying about your profitability:
1. Delayed Data is Dangerous Data
Most platforms require extensive manual input or batch processing to update job costs. This means the WIP report you generate today is based on data that is days, or even weeks, old.
The Lie: The report shows Job A is on track.
The Reality: A massive, un-posted material invoice just arrived, meaning Job A is suddenly over budget and in trouble. Because the software wasn't designed to integrate costing at the transactional level, you missed the warning sign.
2. Miscalculating Under and Over Billing
This is the cornerstone of WIP accuracy, and it’s where outsiders always fumble. Under-billing (you've done more work than you've billed for) and Over-billing (you've billed for more than you've completed) are not simple cash balance issues; they reflect crucial adjustments to your revenue recognition.
Generic software often misclassifies these items or requires tedious, manual journal entries to correct them. They treat it like a simple receivable.
The Insider Truth: A true construction accounting platform must automatically calculate the Estimated Cost to Complete and the Earned Revenue based on the percentage of completion, ensuring the Under/Over calculation is instantaneous and correct—a process Controllr handles without requiring a separate spreadsheet.
3. Treating Retainage as Simple Receivables
Retainage is a huge chunk of cash that exists in a financial limbo. Systems built by non-construction experts lump retainage into standard Accounts Receivable (A/R). This misrepresentation distorts your true cash position and confuses bonding agents who are looking for clear, compliant accounting.
When your software doesn't properly segregate and track the different stages of retainage release (owner retainage vs. subcontractor retainage), your WIP becomes misleading, and your cash flow planning is compromised.
The Controllr Solution: Accuracy Hard-Coded
We didn't just add a "WIP module" to an existing finance package. We built Controllr around the needs of the WIP report because we know it’s the ultimate metric for success.
Our decades of experience as construction accountants allowed us to hard-code industry best practices into the core structure of the software:
Real-Time Job Costing: Every expense, invoice, and payroll run is instantly allocated and reflected in your WIP calculation. You see the true financial picture as it happens.
Automated Accuracy: Controllr manages the complex calculations for revenue recognition, ensuring under- and over-billing figures are compliant and correct without manual intervention.
Clear Visibility: Our dashboards provide a single, clear view of all jobs, highlighting variances and potential profit issues before they become terminal problems.
You deserve a financial system that speaks the language of construction profitability. You deserve the confidence of knowing your WIP report is 100% accurate. You deserve Controllr.
Ready to stop trusting spreadsheets and start relying on verifiable, real-time data?
Schedule a demo to see how Controllr transforms your WIP reporting and financial control.
