How Construction Accounting Software Helps Improve Your WIP Reports?

September 15, 2022

Construction accounting software helps contractors eliminate repetitive tasks and incorporate all main aspects of a construction project into one system: costing, payroll and accounts. Having access to all essential data at your fingertips brings about better reporting. 

One vital document all contractors need is the Work-In-Progress Construction Report. 

What Is a WIP or Work-In-Progress Construction Report?

At a basic level, a WIP report indicates if the contractor's job cost estimation is correct and if the amount billed is right. In other words, is the project over-billed, under-billed, or on budget for the timeline given? 

This report usually serves as a benchmark of a contractor's credibility.

What Does a WIP Report Usually Include?

As WIP reports reveal the financial health of a construction project relative to its progress, they can avoid red flags early on to prevent financial losses. A WIP report usually includes:

  • Percentage of project completion 
  • The total amount as stated in the contract
  • Estimated costs
  • Costs incurred so far
  • Remaining profit
  • Over-billing or under-billing
  • Billed revenue
  • Paid revenue
  • Project backlog

Collecting such information across departments is an effective way for construction contractors to become more efficient and generate an accurate picture of their projects.

Common Problems in WIP Reporting

Tracking the values of a WIP report, such as inventory, vendors and resources, becomes more complex as the project progresses. When done manually, WIP reporting can lead to many errors:

  • Errors in data entry
  • Duplicate data entry issues from several departments of the construction company
  • Forgotten invoices, miscommunication, lost documentation, and other human errors
  • Non-standardised data entry

How Does Construction Accounting Software Improve Your WIP Reports?

Gone are the days of calculating the WIP manually. Because all main functions of construction accounting are integrated, contractors have access to this information. The construction accounting software just puts it together. 

WIP reports can be generated with just a few clicks by keying in job information, and any job changes are automatically factored in once entered into the system. Construction accounting software further:

  • Provides accurate, real-time data. 
  • Tracks percentage of work completed rather than hours or labour costs, which provides early warning signs if productivity is lagging.
  • Determines 'cost to complete'.

At Quest Construction Software, we take great pride in our ability to deliver construction management software solutions to suit your project needs and budget.