Why You Need a WIP Report Template
The Work-in-Progress (WIP) report is how contractors know whether they're actually making money. Revenue recognition in construction doesn't follow cash — it follows the percentage-of-completion method. The WIP report reconciles what you've earned (based on work completed) against what you've billed (based on pay applications).
Without a WIP report, you can't tell whether you're overbilled or underbilled on a project until it's too late. A project that looks profitable based on cash receipts might actually be losing money when you account for the work remaining and the costs to finish it.
What's Inside the Template
The spreadsheet includes a complete WIP report framework designed for solar contractors:
- Project-level rows — Each active project gets a row with contract value, estimated total cost, and actual costs to date
- Percent complete calculation — Cost-based percent complete (actual costs ÷ estimated total cost) drives earned revenue
- Earned revenue — Contract value × percent complete gives you the revenue you've actually earned, regardless of billing
- Billing comparison — Actual billings to date compared against earned revenue to calculate over/under billing
- Cost-to-complete — Estimated remaining cost to finish each project, updated monthly
- Projected profit — Estimated final profit for each project based on current cost trends
- Portfolio summary — Totals across all projects for aggregate over/under billing and projected margin
How to Use It
- Download the template and open it in Excel or Google Sheets
- Add your active projects — one row per project with contract value and original cost estimate
- Update actual costs monthly — pull from your accounting system or job cost reports
- Revise estimated total cost — if costs are trending higher or lower than expected, update the estimate to complete. This is the most important number in the WIP
- Compare earned vs. billed — the template calculates whether you're overbilled (billed more than earned) or underbilled (earned more than billed)
- Review with your accounting team — the WIP report drives financial statements, bonding capacity, and tax reporting
Understanding Over/Under Billing
Overbilled means you've billed more than the value of work you've completed. This shows as a liability on your balance sheet — you owe work to the owner. Moderate overbilling is normal and healthy for cash flow, but excessive overbilling can mask profitability problems.
Underbilled means you've completed more work than you've billed for. This shows as an asset on your balance sheet — the owner owes you money. Persistent underbilling creates cash flow problems and often signals billing process issues.
The goal is to be slightly overbilled across your portfolio — meaning cash comes in ahead of costs. But the WIP report's real value is showing you the truth about project profitability before cash flow hides it.
Customization Tips
Update cost estimates honestly. The WIP report is only as good as your estimated cost-to-complete. Don't leave original estimates unchanged when costs are trending higher — that just delays recognizing a loss.
Include all costs. Make sure actual costs capture everything: labor, materials, subcontractors, equipment, overhead allocation, and change order costs. Missing cost categories make projects look more profitable than they are.
Review monthly, at minimum. The WIP should be updated every month as part of your close process. Many contractors review it weekly on active projects to catch trends early.
Track original vs. revised estimates. Keep the original cost estimate visible alongside the current revised estimate. This helps you understand how well you estimated and whether scope changes are driving cost growth.
Separate completed projects. Once a project is closed out, move it to a completed section. Your active WIP should only show projects with remaining work.
How the WIP Report Connects to Your Project Systems
The WIP report is where project management and accounting meet:
- Budget — Actual costs from the project budget feed directly into the WIP. The budget tells you what you've spent; the WIP tells you what that spending means for profitability
- Schedule of Values — SOV billings provide the "actual billings" side of the over/under billing calculation
- Pay Applications — Monthly pay app amounts flow into the WIP as billings to date
- Financial Statements — The WIP drives revenue recognition on your income statement and over/under billing on your balance sheet
- Bonding — Surety companies review your WIP report to assess project health and bonding capacity. Clean WIP reports support higher bonding limits