The Essential Guide to Construction WIP Reports: What Every CFO Needs to Know

From a CFO or finance director’s seat, a work-in-progress (WIP) report is meant to help you translate active construction projects into real-time financial performance by connecting actual costs, percent complete, and earned revenue to show true margin health before jobs are finished. For construction companies, WIP reporting is a core signal of overall financial health and financial status.

When WIP reports are timely and accurate, you get early visibility into project progress, estimated costs, actual project costs, and revenue forecasts tied to ongoing projects.

The problem is that most construction industry finance teams still rely on manual Excel sheets and lagging ERP data to produce a WIP report. By the time reports are finalized, the insights are already outdated. The result? Margin surprises driven by cost overruns, reactive decision making, and missed opportunities to correct issues while projects are still in motion.

What a Strong WIP Report Should Include (and What Most Don’t)

Construction project management is a complex matrix of financial inputs, timelines, and risk variables that must stay aligned to protect margins and maintain predictable cash flow. An effective WIP report connects project costs, costs incurred, and earned revenue to answer critical questions about project finances, including:

• Are we ahead or behind on margin by job?

Accurate WIP reports allow project managers to forecast completion costs and adjust resource allocations as needed.

• Are we overbilling or underbilling relative to work completed?

Accurate billings in the construction industry are essential to reducing the risk of billing disputes and contractual obligations.

Overbilling happens when a contractor bills a client for costs that exceed the portion of work actually completed, effectively recognizing revenue ahead of performance.

Underbilling occurs when the amount billed lags behind project progress, meaning earned revenue has not yet been fully invoiced.

• Which jobs are driving cash flow problems and straining cash flow management?

Routine monitoring of WIP reports can help you spot timely issues such as fade trends to see which projects are eroding profits.

• What’s our revenue run rate this quarter?

WIP reports should provide a snapshot of the financial status of all active projects so companies can see if annual revenue goals will be met.

To deliver that level of insight, a strong WIP report should clearly outline the following metrics: 

• Total contract value
• Costs incurred
• Percent complete (actual vs. forecast)
• Recognized revenue
• Over/under billings
• Projected margin vs. project budget

When these components update consistently and accurately, finance leaders and project managers can spot risk early, forecast with confidence, and protect profitability — something most spreadsheet-driven WIP processes fail to do in time.

The 5 Most Common WIP Reporting Gaps

1. Data silos across ERP systems, estimating tools, and spreadsheets.
   Finance teams spend hours reconciling disconnected data, delaying close cycles, and increasing the risk of reporting errors that mask true margin performance.
2. No linkage between WIP and revenue forecasts.
   Without this connection, revenue timing becomes unreliable, leading to inaccurate backlog projections, poor labor planning, and missed growth targets.
3. Static reports don’t reflect real-time changes.
   By the time reports reach leadership, financial conditions have already shifted, undermining cash flow planning, bonding confidence, and strategic decisions.
4. No variance analysis between budget and actuals.
   Cost overruns surface too late, causing margin erosion to compound before corrective action can be taken.
5. No consistency across divisions or estimators.
   A construction project involves many stakeholders including contractors, subcontractors, and clients. Without standardized construction accounting practices, it can be difficult to benchmark projects, forecast accurately, and meet client expectations.

Best Practices for WIP Reporting in Mid-to-Large Construction Firms

At its best, WIP reporting is more than a compliance report, it becomes a strategic lever that can help construction firms protect and scale their profitability.

Here are some best practices for effective WIP reporting: 

• Track job costs, revenues, and project progress at regular intervals: weekly if you’re an executive, daily if you’re a project manager.
• A WIP report should always include key metrics such as total contract revenue, total costs incurred, and percentage of completion.
• Forward-thinking finance teams are investing in construction accounting software like ContractorBI™.

By automatically pulling from ERP and project systems, ContractorBI streamlines WIP creation to minimize errors, keep reports continuously updated, and improve overall financial performance. The result is real-time margin visibility, clearer revenue forecasts, stronger cash flow control, and fewer financial statement surprises as projects progress.

From Reactive to Proactive Work in Progress With ContractorBI

WIP reports shift contractors from reactive to proactive management throughout the project lifecycle. You know the old way of doing things. It’s time to adopt the new.

How ContractorBI Helps Construction Finance Leaders

Unlike project management-focused tools or generic BI dashboards, ContractorBI is built for construction finance leadership. Your projects generate massive amounts of data across estimating, accounting, and operations and ContractorBI brings it together into focused financial dashboards for WIP, cash flow forecasting, bid pipeline visibility, and more.

By integrating directly with systems you already use — like Sage 100 Contractor/300 CRE/Intacct Construction, Viewpoint Spectrum, and Procore — you get a unified, real-time view of performance without manual reconciliation. More importantly, ContractorBI connects WIP directly to your revenue forecasts and bonding calculations, so every update reflects how today’s project performance impacts future capacity and growth.

You don’t need PowerBI development, complex data models, or a team of analysts to make it work. Our platform is purpose-built for construction finance. And when questions arise, you can drill down instantly by job, estimator, division, or cost code to uncover exactly where margins are shifting and why across all construction projects.

With a tool like ContractorBI, your team will be equipped to treat WIP as a living financial model, not a monthly spreadsheet exercise.

Stop Getting Surprised by Margin Fade

WIP reporting is no longer just a compliance task; it’s a core function for financial leadership that directly impacts your firm’s profitability and forecasting confidence. When costs, revenue recognition, and project progress aren’t tracked accurately or consistently, finance teams lose visibility into margin erosion until it’s too late.

Construction accounting software like ContractorBI eliminates much of that risk by automating data flow, reducing manual errors, and keeping WIP continuously current, so that leaders like you can proactively address issues early and maintain financial control.

With ContractorBI, your team can move from reactive number gathering to proactive decision-making. Start your 14-day free trial (no credit card required) and see your WIP performance in real-time.