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WIP Over/Under Billing Calculator.

Enter four numbers from any active job and instantly see your percentage of completion, revenue earned to date, and whether the job is over-billed or under-billed. This is the same math sureties and lenders run on your WIP schedule.

How the calculation works.

Percentage of completion equals costs incurred to date divided by total estimated costs (costs to date plus cost to complete). Revenue earned equals that percentage multiplied by the contract value. Your over or under billing position is simply the amount billed to date minus the revenue earned. These three numbers are the core of every WIP schedule, and they are exactly what surety underwriters examine before deciding your bonding capacity.

Why the cost-to-complete number matters most.

The weakest input on most contractor WIP schedules is the estimated cost to complete. If your project manager has not updated it since the job started, the percentage this calculator returns will be wrong in exactly the same way your WIP schedule is wrong. Update cost-to-complete monthly at minimum, and treat any job whose projected gross profit is shrinking from month to month as an early warning that deserves attention.

What to do with the result.

Significant under-billing means cash you have earned but not collected: check for unbilled change orders and billing lag. Consistent heavy over-billing across many jobs can signal borrow-from-the-next-job cash flow, a pattern sureties treat as a red flag. If your whole-company WIP does not tie to your general ledger, that is the first thing to fix, and it is exactly the kind of engagement a construction CPA handles.

Disclaimer: This calculator provides simplified estimates for educational purposes based on the cost-to-cost percentage of completion method. It does not account for retainage, contract modifications, uninstalled materials, loss jobs, or GAAP nuances that apply to specific situations. It is not accounting or tax advice. Consult a licensed CPA before making decisions based on these figures.
Frequently Asked

WIP calculator questions, answered.

How do you calculate over and under billing in construction?
Over or under billing equals the amount billed to date minus revenue earned to date. Revenue earned is percentage of completion (costs to date divided by total estimated costs) multiplied by the contract value. A positive result means over-billed (a liability called billings in excess of costs); a negative result means under-billed (an asset called costs in excess of billings).
What is a good percentage of completion for billing?
Healthy contractors typically bill slightly ahead of completion early in a job (modest over-billing that funds mobilization) and converge to even by project close. Consistent large under-billing signals billing lag or unapproved change orders, while chronic heavy over-billing across many jobs can signal cash flow stress to surety underwriters.
Why do sureties care about over and under billings?
Sureties read the over/under position on the WIP schedule to judge whether a contractor can finish current backlog without running out of cash. Heavy over-billing means future work must be performed with no matching incoming cash. Heavy under-billing ties up working capital. Both affect bonding capacity.

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