What the schedule reconciles
For each open job it compares costs incurred, the percentage of the contract that represents, revenue that should be recognised, and revenue actually billed. The gap between the last two is the finding.
Underbilling
You have done more work than you have invoiced. You are financing the customer out of your own working capital. Small amounts are normal timing; a persistent pattern means your billing schedule does not match your work schedule, and it is a direct drain on cash.
Overbilling
You have invoiced ahead of the work. Good for cash, but the money is not earned and spending it creates a hole later in the job. Heavy overbilling across several jobs is a warning sign in lender and bonding reviews.
The estimate is the other half
A WIP schedule is only as good as the estimated cost to complete. An estimate that has not been revised since the job started will show healthy margin right up until it does not. Revising estimates monthly is what makes the report predictive rather than historical.
What bonding companies and lenders look for
Consistent gross margin across jobs, estimates that get revised rather than held flat, and overbilling that is modest and explainable. Large swings between periods raise questions regardless of the final outcome.
TallyWise provides this as part of our construction accounting services. Book a call to talk through your situation.
