Reporting & WIP
What is underbilling?
Definition
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.
What it means
Underbilling means you've done work you haven't billed for. Sometimes that's timing: a pay app is about to go out. Often it's a signal of unapproved change orders, missed billings, or costs running over estimate.
Underbilling
Underbilling = Earned revenue − Billings to date (when positive)
Why sureties look closely
Sureties and lenders often discount underbillings because they can hide cost overruns. A job that stays underbilled month after month deserves a closer look at its cost to complete.