Construction owners face constant financial pressure—tight margins, slow pay cycles, and unpredictable job costs. But one of the most avoidable financial pain points is flying blind without a reliable work-in-progress (WIP) report. If you’re not using a WIP report to track real-time job profitability and cash flow exposure, you’re leaving money—and control—on the table.
Top 5 Financial Pain Points in Construction
1. Over/under billing surprises: unexpected tax hits or cash shortfalls due to billing not aligning with actual progress.
2. Delayed receivables: long AR cycles, especially from GCs, slow down cash flow.
3. Cost overruns: inaccurate estimates or weak job costing bleed profits.
4. Cash flow crunches: payroll is due weekly—your payments are not.
5. Missed forecasts: without integrated project data, financial forecasting is just guesswork.
The WIP Report – Your Financial Lifeline
- What it is: a WIP report compares actual costs and billings against estimated progress.
- Why it matters: it reveals over/under billings, identifies jobs at risk, and helps plan cash flow.
- How It Helps:
- Catch Revenue Leakage Early
- Prioritize Billing Actions
- Prepare For Tax Liabilities
- Strengthen Bonding Capacity
Real-World Impact
Example: a contractor was underbilled by $400k across several projects without realizing it. Once we implemented a monthly wip review, they improved collections, smoothed cash flow, and gained leverage with their bank and bonding agent.
What To Do Next
- Implement monthly WIP reporting—review it like a P&L.
- Use it to guide billing, collections, and job costing updates.
- Don’t wait for year-end CPA reports—use WIP to manage now.
- Work with a financial partner who understands construction nuances.
Want clarity on your job performance and cash position?
A properly built WIP report gives you real-time visibility, accountability, and leverage. If you’re ready to get a handle on your numbers, Gray Feather CFO can help.
