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Reporting & WIP

What is overbilling?

Definition

Billings in excess of costs and estimated earnings: you've invoiced more than you've earned on a job. It's recorded as a liability on the balance sheet.

What it means

Overbilling happens when billings to date exceed earned revenue. Front-loaded schedules of values and early mobilization billing are the usual causes. The cash is in your account, but you still owe the work.

Overbilling

Overbilling = Billings to date − Earned revenue (when positive)

Is overbilling good or bad?

Modest overbilling is healthy cash management. Heavy, persistent overbilling is a warning sign: it can mask a job that's losing money and leave you short when the remaining work comes due.

Related terms

Underbilling

Costs and estimated earnings in excess of billings: you've earned more than you've invoiced on a job. It's recorded as an asset on the balance sheet.

WIP schedule

A work-in-progress schedule lists every open job with its contract value, costs to date, estimated cost to complete, billings, and the resulting over- or underbilling.

Schedule of values

A breakdown of the contract sum into line items, each with a value, used as the basis for progress billing.

Guides that cover this

Reporting & WIP

What Is a WIP Report? A Contractor's Guide

The WIP report tells you which jobs are making money, which are fading, and how much of your cash is really yours. Here's how to read one and build it every month.

Done-for-you construction finance

Get your WIP, job costing, and close done every month.

BuildFlash runs your monthly finance on top of the software you already use, with a fractional CFO reviewing the numbers with you.

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