WIP & Over/Under Billing Calculator — Marawood Construction Accounting

Why this matters more than your income statement: Your P&L is historical — it reflects work already billed and costs already recorded. By the time you read it, you cannot change it. Your WIP position is current — it shows whether the revenue you have billed matches the work you have actually completed. An overbilling that burns off on a job that goes over budget becomes a loss you could have seen coming. An underbilling means you have earned revenue sitting uncollected, quietly draining your cash flow. The time to act on WIP is now, not at year-end.

Overbilled / Billings in Excess

You have billed more than you have earned based on percentage complete. The excess is a liability — deferred revenue you owe in future work. Contractors often mistake overbilling for profit. It is not. If the job runs over budget, that "profit" disappears.

Overbilled = Billed to Date − Earned Revenue
Earned Revenue = Contract Value × % Complete

Underbilled / Costs in Excess

You have billed less than you have earned. The shortfall is a current asset — revenue you have earned but not yet collected. Persistent underbilling is a cash flow warning sign. It means your billing cycle is lagging behind your work, funding the job from your own working capital.

Underbilled = Earned Revenue − Billed to Date
Earned Revenue = Contract Value × % Complete

Active Jobs

3 jobs

#	Job Name	Contract Value (?)	Estimated Cost (?)	Cost to Date (?)	Billed to Date (?)	% Complete (?)	Earned Revenue (?)	Over / (Under) (?)	Budget CTC (?)	Revised CTC (?)	Est. Margin (?)	Margin Fade (?)

Portfolio Summary

Total Overbilled (?)

billings in excess of costs

Total Underbilled (?)

costs in excess of billings

Net WIP Position (?)

net position

Projected Gross Profit (?)

at completion — all jobs

Portfolio Margin — Budget (?)

—

wtd avg at budget CTC

Portfolio Margin — Revised (?)

—

wtd avg at revised CTC

Total Margin Fade (?)

—

in lost gross profit vs. budget

Why the Revised Cost to Complete Changes Everything

The Problem with % Complete Alone

The cost method says you are 40% complete because you have spent 40% of your budget. But what does that really mean?

It could mean the job is genuinely 40% done. Or it could mean you have spent 40% of your budget but only finished 30% of the work — and the remaining 60% of the budget will not be enough to complete the job. The math looks the same. The outcome is very different.

Common reasons % complete overstates progress:

Cost overruns in early phases have consumed budget that was earmarked for later work
Change orders have been issued and the work is done — but the contract value has not been updated
Scope has expanded informally without a formal change order, so costs are up but contract value is flat
Productivity has been lower than estimated — the same cost has produced less work
Material or subcontractor costs have exceeded budget due to market conditions

Why the Revised CTC Tells the Real Story

The Revised Cost to Complete is a forward-looking estimate: what will it actually cost, starting from today, to finish this job? It requires someone who knows the job to look ahead — at what is left to do, at current productivity rates, at outstanding subcontractor commitments — and make a realistic estimate.

When the Revised CTC is higher than the Budget CTC, that difference is margin fade — profit that existed on paper is being consumed by cost overruns. Catching it now means you can still act:

Issue change orders for scope that has been done but not billed
Tighten cost control on remaining work before the budget is fully consumed
Have a conversation with the owner about cost impacts before the job is complete
Adjust your cash flow forecast to reflect the revised margin position

The WIP schedule is the only place you can see this. Your income statement will record the loss when the job closes. The WIP schedule — updated monthly with honest CTC estimates — lets you see it coming while you can still change the outcome.

Assessment

Enter your job data above to see your assessment

Fill in at least one job above to see a plain-language assessment of your WIP position and what it means for your business.

Next Steps — Marawood Construction Accounting

Knowing your WIP position is the first step

A WIP schedule that works for your surety, your banker, and you.

This tool gives you a snapshot. A proper WIP schedule — maintained monthly, reconciled to your books, and formatted to surety standards — is a different thing entirely. Marawood prepares WIP and WOH schedules as part of every Journeyman and Red Seal engagement, giving you the financial credibility that opens doors with sureties and lenders.

Free 30-minute session No obligation Surety-ready reporting

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