How to Read Your WIP Report Like a CFO

For Construction Contractors Who Want True Financial Clarity

Your Work in Progress (WIP) report is more than a spreadsheet—it’s your financial roadmap. When read correctly, it reveals how your jobs are performing, whether profits are on track, and how cash flow aligns with your project progress.

When read like a CFO, your WIP becomes a strategic management tool—not just an accounting requirement.

🧭 1. Understand What Your WIP Report Really Tells You

Your WIP report answers the questions every construction owner should be asking:

• Are we ahead or behind budget?

• Are we overbilling or underbilling?

• Are profits fading or improving?

• Is our cash flow keeping up with project progress?

Think of it as a monthly “financial health check” for your jobs—and for your business.

📊 2. Focus on the Columns That Matter Most

A CFO looks beyond the totals and zeroes in on the indicators that reveal job health:

• Contract Value - Total revenue expected, including change orders

• Cost to Date - Actual costs incurred so far

• Percent Complete - Cost to date ÷ total estimated cost

• Earned Revenue - Revenue recognized based on progress

• Billings to Date - How much has been invoiced

• Over/Under Billings - The difference between earned revenue and billings

💡 Pro Tip: These columns tell a story—about productivity, profitability, and project control.

⚠️ 3. Catch Profit Fade Early

Profit fade—when projected profits slip as jobs progress—is one of the most critical warning signs a CFO watches.

Example: If your WIP shows a job is 50% complete but 70% of the costs are already incurred, that job is bleeding margin.

👉 Investigate immediately. The cause might be:

• Unapproved change orders

• Estimating inaccuracies

• Productivity issues or scope creep

Identifying fade early helps protect margins before the final invoice.

💵 4. Watch Over/Under Billing Trends

Your billing position directly affects both cash flow and profit visibility.

Billing Type What It Means Why It Matters

Overbilled Billed more than earned Boosts short-term cash flow but can mask job issues

Underbilled Earned more than billed Hides profit and can strain cash

A CFO looks for patterns:

• Chronic underbilling → weak project management or delayed documentation.

• Persistent overbilling → short-term cash gain but potential backlog of future costs.

Healthy companies keep billing closely tied to earned revenue—and know why variances exist.

🔁 5. Tie Your WIP to Cash Flow

Even profitable projects can drain cash if billings and expenses aren’t aligned.

Ask yourself:

Are overbilled jobs inflating cash temporarily?

• Are underbilled jobs choking your working capital?

• Are you funding materials or labor before billing milestones?

A CFO connects the dots between WIP, A/R, and cash flow forecasting—ensuring every job supports a stable financial foundation.

📈 6. Turn Insights Into Action

Reading the WIP is only half the battle. Acting on it is where growth happens.
Use your WIP insights to:

• Reforecast job profitability monthly

• Update labor and productivity benchmarks

• Improve estimating accuracy

• Strengthen billing and change order processes

✅ When you treat your WIP as a management tool, not a report, it drives smarter decisions and long-term profitability.

🧩 7. Partner With a CFO Who Speaks “Construction”

Interpreting a WIP report the right way takes both financial expertise and industry experience.
At Aspire CFO Solutions, we help contractors turn job data into clarity, control, and confidence.

If your WIP feels like a mystery instead of a management tool—let’s fix that.
Schedule a free consultation and start reading your numbers like a CFO

→ Schedule a Consultation

About Aspire CFO Solutions

Aspire CFO Solutions provides fractional CFO and controller services to construction contractors and manufacturers. We help business owners achieve financial clarity, stability, and growth through stronger systems, reporting, and strategy.