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Construction · WIP & revenue
WIP Schedules & Percentage-of-Completion Accounting
Percent complete, over/underbillings and loss contracts, done right, monthly or at year-end.

WIP & revenue recognition

WIP schedules and percentage-of-completion accounting for contractors

Greywood CPA builds and reviews work-in-progress (WIP) schedules and percentage-of-completion revenue for contractors. Most construction contracts are recognized over time under ASC 606, usually measured by costs incurred to date compared with estimated total costs. The WIP schedule is where that calculation lives, and it is the first thing your surety and lender read.

We can prepare your WIP schedule monthly, so you see margin problems early, or at year-end as part of your financial statements. For audit clients, this work is done by a separate team so the audit stays independent.

Last reviewed: November 2026

Request a fixed-fee proposal Call (804) 630-8140

How percentage-of-completion works

For each contract: percent complete = costs incurred to date ÷ estimated total costs. Earned revenue = contract value × percent complete. Compare earned revenue with what you've billed:

If billings are…ResultBalance sheet
Higher than earned revenueOverbillingA liability (contract liability)
Lower than earned revenueUnderbillingAn asset (contract asset)

What a WIP schedule includes

  • Contract value, including approved change orders
  • Estimated total cost and estimated gross profit
  • Costs to date and percent complete
  • Revenue earned to date
  • Billings to date
  • Over- or underbilling
  • Cost and revenue still to come (backlog)

Getting estimates right

The WIP schedule is only as good as the cost-to-complete estimates behind it. Project managers should update estimates at least monthly. Watch for:

  • Uninstalled materials sitting on site, which may need to be excluded from costs used to measure progress
  • Unapproved change orders, which only count when they are probable and can be estimated
  • Loss contracts: when total costs will exceed contract value, the whole expected loss is recorded immediately
  • Gross profit fade: margins shrinking as jobs finish, a sign estimates were too optimistic

Closed-job schedules and backlog

Sureties and lenders also want a schedule of jobs completed during the year, with final contract value, cost and margin compared to original estimates. Together with backlog, this shows whether you estimate accurately.

How the engagement works

  1. Review callDay 1

    Your job list, estimating process and current WIP.

  2. Fixed-fee proposalWithin 1–3 business days

    Monthly or year-end scope, one fixed fee.

  3. BuildWeeks 1–2

    A WIP template tied to your job cost ledger.

  4. Monthly or year-endOngoing

    Updated WIP, over/underbillings and margin trends.

Why contractors choose Greywood CPA

  • Fixed fee, agreed first. No hourly billing and no surprise invoices.
  • Senior people on your file. Every engagement is led by a senior professional and signed off by a CPA partner. Meet the team.
  • Licensed and registered. Virginia Board of Accountancy firm license #134961, AICPA member, with out-of-state registrations where required. See our credentials.

Related

Job costingThe ledger your WIP is built from.View →Surety & bonding financialsStatements your surety underwrites.View →ConstructionAll construction services.View →

WIP and percentage-of-completion FAQs

How is percent complete calculated?

Most contractors use the cost-to-cost method: costs incurred to date divided by estimated total costs for the contract.

What is the difference between an overbilling and an underbilling?

An overbilling means you've billed more than you've earned, which is a liability. An underbilling means you've earned more than you've billed, which is an asset that sureties and lenders scrutinize.

When do I record a loss on a contract?

As soon as you expect total costs to exceed the contract value. The entire expected loss is recorded in that period, not spread over the remaining work.

Do change orders count in the WIP schedule?

Approved change orders do. Unapproved change orders and claims are included only when they are probable and can be reliably estimated.

How do your fees work?

We quote one fixed fee in writing for year-end WIP, or a fixed monthly fee, based on the number of open contracts.

Want a WIP schedule your surety trusts?

Send us your job list. A senior CPA will send a fixed-fee proposal within 1–3 business days.