What is WIP? CountBricks Guide for Residential Builders

Understanding Work In Progress (WIP) in Residential Construction

Work In Progress (WIP) is a crucial financial metric for residential builders, representing the value of ongoing projects not yet completed. Accurately tracking WIP can significantly impact your bottom line, helping you manage cash flow and avoid unexpected costs. In 2025, installation rates for residential projects can range from $650-$1200 per opening, making precise WIP management essential.

Defining WIP for Construction Professionals

WIP in construction refers to the portion of labor and materials already utilized on-site but not yet invoiced. For example, a framing contractor's WIP includes all installed components that are part of the project but not yet billed as finished work.

Key Components of WIP

Contract Value: Total agreed price with the client
Cost-to-Date: All direct costs incurred so far
Percentage Complete: Cost-to-Date ÷ Estimated Total Cost
Earned Revenue: Contract Value × Percentage Complete
WIP Position: Earned Revenue - Invoiced Amount

A positive WIP position indicates revenue earned but not yet invoiced, while a negative position suggests billing ahead of progress, which can be risky if costs overrun.

Common Misconceptions

WIP is not just an accounting exercise; it's a real-time performance gauge.
Over-billing can mask budget overruns.
Under-billing may starve your business of cash.

Why WIP Reporting is Essential

Cash Flow Management

Without WIP visibility, you might fund projects out of pocket before receiving payments. Regular WIP reviews ensure timely invoicing and stable cash flow.

Risk Detection

Identify scope creep early when costs rise faster than completion.
Spot delayed payments by comparing earned revenue to receipts.
Detect profit fade when projected margins dip below bid margins.

Automating WIP with CountBricks

Real-Time Voice Capture

CountBricks' mobile interface allows foremen to narrate progress, converting speech into quantifiable data for instant updates.

AI-Powered Cost Tracking

Live material pricing aligns estimates with current rates.
Automated timecards integrate labor hours into Cost-to-Date.
The WIP dashboard highlights billing variances.

Explore these tools at CountBricks.com for more insights.

Building a WIP Schedule

Import or create your project in CountBricks.
Approve AI-generated budget lines.
Connect supplier feeds for real-time rates.
Sync accounting platforms for automatic invoicing.
Review the WIP dashboard weekly.
Export reports for stakeholders.

Best Practices for WIP Management

Update budgets with approved change orders.
Reconcile subcontractor invoices weekly.
Use consistent cost codes across platforms.
Train site leads to capture percent complete in measurable units.
Schedule monthly WIP meetings with key stakeholders.

Frequently Asked Questions

Is WIP only for larger builders?

Even small remodelers benefit from knowing earned but unbilled revenue. The principles scale to any size.

Does WIP replace cash flow forecasts?

WIP provides raw data for better cash forecasts, integrated in CountBricks' platform.

Can I calculate WIP without software?

Manual calculations are possible but prone to errors. CountBricks automates the process for efficiency.

Take Control of WIP Today

Understanding WIP is the first step; acting on it grows profits. Schedule a demo at CountBricks.com to see how effortless WIP management can be.

Our AI app can generate costed estimates in seconds.

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What is WIP? CountBricks Guide for Residential Builders

Case Study: Framing Contractor Enhances Margins with WIP

A regional framing firm improved its margins by 6% through effective WIP management using CountBricks. By activating the WIP dashboard, they gained visibility into seven simultaneous projects.