Blog | thewipreport

Do you know how you’re recognizing revenue? Here’s how to check and what it means.

A lot of contractors recognize revenue after every billing. Meaning, the entire amount of that progress billing you just sent out for...

How do you know you're calculating WIP correctly?

You'll never really know if you're calculating WIP correctly. That doesn't mean you should lose all hope. There are three things you...

What goes up, must come down

Don't get too excited about your income statement if you have unadjusted WIP on your books at year end. WIP needs to be adjusted by year...

From Open to Close: The Cycle of WIP

Time for a demonstration! Even if you're pretty familiar with how WIP works, it's always helpful to run different scenarios using the WIP...

Your First Year Reporting WIP: Different Presentations

So, you’ve decided to prepare a WIP schedule this year and to make all the necessary journal entries. That’s great! I typically see two...

Best Practice: Billings and Costs on Small Jobs

The approach to recording billings and costs on small jobs is a bit of grey area. Some companies create separate project IDs for every...

Number your accounts. Trust me. It will make things easier.

I know there is software out there that allows you to create your chart of accounts without assigning numbers. That's great, but it's...

WIP Tip: You recorded a journal entry. Now what?

Get in the habit of generating a new trial balance every time you record a journal entry (or entries) to double check your work. Did you...

You're on completed contracts method and don't even know it!

According to the completed contract method of revenue recognition, an entity recognizes revenue on a project when it's completed. So any...

Know which jobs are open at year end!

Your CPA will always want to know which jobs were open at year end. Meaning, which jobs had costs to be incurred in a future period. So...

Don't finalize your financials until your bond agent has looked at the draft!

Here's how the process of issuing a review or compilation report with financial statements should look like: 1) Your CPA sends you a...

How should you treat non-business related expenses?

Whether you're making payments out of the company account to pay down a personal loan, or to pay for a subscription service for your...

What is an overbilling?

Overbillings/Billings in excess of costs and estimated revenues/Contract Liabilities: Just because your billings are higher than your...

What does it mean to be underbilled?

The term underbilled sounds simple enough. When you have more costs on a job than you have billings, there's an underbilling and the...

Don't skew your over/underbillings with unrecorded job costs

Unrecorded job costs can really mess with your financial statements and WIP report. I've chalked up an example to help demonstrate this...

Do you know what you’re Paying Your CPA for?

It’s after year end and you’re patiently waiting for the most anticipated email of the year; the email from your CPA asking if your books...

When is a project considered "closed"?

What's considered a closed project can vary. Typically, when the project is substantially complete with all costs incurred, and no...

Don't overlook retainage

I've seen it done many times. Accountants progress billing without recording retainage. Why is this an issue? Two reasons: 1) You're...

Vendor Check!

We're all working with limited resources these days, however, that shouldn't limit your ability to manage your vendor list. Consider...

Gain/Loss on Asset Disposals: Another Template!

It's likely that you dispose of assets every year. Waiting until year end to adjust the gain-loss on disposals could skew your financials...

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The content provided on this website is for educational purposes only. While every effort has been made to ensure the accuracy of the information, the lessons, materials, and resources related to construction accounting are not intended to replace professional advice. I recommend that you consult with a certified accountant or other industry expert before making any financial decisions or implementing accounting practices in your business.

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