How Often Should You Run a WIP Report?

I get asked this question constantly: "How often should we run WIP reports?" The answer depends on your size, project complexity, and risk tolerance — but here's the short version: if you're only running WIP annually (or worse, never), you're flying blind. Monthly is the minimum. Weekly is ideal for any job with margin risk.

Why This Matters

WIP frequency directly correlates with margin protection. The faster you identify problems, the more options you have to fix them. A cost overrun caught in week four can be managed with change orders, schedule adjustments, or subcontractor negotiations. The same overrun caught in month nine leaves you with few options beyond absorbing the loss.

I've watched contractors lose $200K on jobs because they didn't realize they had a problem until the project was 80% complete. If they'd been reviewing WIP monthly, they would have spotted the issue at 30% complete when there was still time to course-correct.

The Case for Monthly WIP

Monthly WIP reporting should be the baseline for any contractor over $3M in revenue. Here's what monthly cadence gives you:

Timely margin fade detection. Most margin problems don't appear overnight. They develop gradually — a subcontractor running over hours here, unapproved scope creep there, materials costing 5% more than estimated. Monthly WIP catches these patterns early.

Accurate financial statements. If you're making WIP adjustments based on your report (which you should be), monthly reporting means your financial statements reflect reality every month, not just at year-end.

Better cash management. Monthly WIP shows you where you're under-billed (money you've earned but haven't invoiced) or over-billed (advance billing you need to work off). This directly impacts your cash forecast and billing strategy.

Cleaner year-end close. When your CPA asks for WIP schedules in January, you're providing 12 months of documentation rather than scrambling to reconstruct a year's worth of projects from memory.

Target timeline: Complete your monthly WIP within 10 business days of month-end. If you're closing WIP in the first week, even better.

When to Run WIP Weekly

For certain situations, monthly isn't frequent enough. Weekly WIP reporting is worth the effort when:

High-risk or fast-moving projects. Any job with tight margins (under 8%), aggressive schedules, or significant change order activity should be reviewed weekly. A $2M job on a 12-week schedule can go from profitable to break-even in two weeks if you're not watching closely.

New project types or customers. If you're doing work that's outside your normal scope — new construction type, new geography, new contract delivery method — weekly WIP gives you early warning if your estimating assumptions were wrong.

Projects with cost-plus or T&M components. These contracts require careful tracking to ensure you're billing everything you're entitled to. Weekly review helps identify billable costs before they're forgotten.

Jobs over $5M. The dollar magnitude justifies weekly attention. A 2% cost overrun on a $10M job is $200K — worth catching early.

Rapid growth phases. If you're scaling quickly (adding crews, taking on larger projects, expanding geography), weekly WIP helps you identify capacity or execution issues before they compound.

Weekly WIP doesn't mean a full formal report every week. It means someone (owner, PM, or project accountant) is reviewing job-to-date costs, estimated costs to complete, and billing position on critical projects every Friday.

Why Annual or Quarterly Is Too Late

Some contractors only run WIP when their CPA asks for it at tax time. This is dangerous for several reasons:

Problems become unfixable. By the time you identify a cost overrun at year-end, the job is often complete. You've lost all leverage to negotiate change orders, adjust scope, or redirect resources.

Cash surprises. You might think you're profitable based on your P&L, but year-end WIP reveals you're sitting on $300K in over-billing that you have to work off. Suddenly your cash forecast is wrong by six months.

Financial statement volatility. Making WIP adjustments only once per year creates massive swings in your December financials that have nothing to do with December performance. This confuses your banker, distorts bonding calculations, and makes trend analysis impossible.

Delayed decision-making. Annual WIP means you're making pricing, hiring, and growth decisions all year based on financial statements that don't reflect reality.

I worked with a $15M contractor who only ran WIP at year-end. They bid aggressively all year thinking they were hitting 15% margins. Year-end WIP revealed actual margins were 7% because three large projects had significant unreported cost overruns. They'd been underpricing all year based on false profitability data.

What Changes Between WIP Reports

Understanding what changes between reports helps you determine ideal frequency:

Cost updates — Actual costs accumulate daily (labor, materials, subcontractors, equipment). The more active the job, the faster costs accumulate and the more important frequent updates become.

Billing updates — You issue invoices monthly (or sometimes more often). Each invoice changes your billed-to-date total and your over/under-billed position.

Estimated cost revisions — As you learn more about the job, your estimated total cost should be updated. Subcontractor bids come in higher or lower than budgeted. Material quantities are refined. Productivity proves better or worse than expected. These changes affect your percentage complete and projected margin.

Change orders — Both approved and pending change orders alter your contract value and cost estimates. They need to be reflected in WIP as soon as they're executed (or even anticipated, if you track pending COs separately).

Matching WIP Cadence to Project Review Meetings

Here's a practical approach: align your WIP cadence with your project review meetings. If you're already meeting weekly to review project status with PMs, incorporate WIP review into that meeting. If you meet monthly, make WIP review a standing agenda item.

Weekly project meetings → Run WIP weekly for projects discussed Monthly financial close → Run full WIP schedule for all projects monthly Quarterly executive review → Use quarterly WIP trends to inform strategic decisions

The goal is to make WIP review a regular operational rhythm, not a special report you scramble to produce when someone asks for it.

The Bottom Line

Monthly WIP reporting is the minimum standard for competent financial management in construction. It catches margin problems while they're fixable, produces accurate financial statements, improves cash forecasting, and makes year-end closing straightforward.

Weekly WIP is worth the incremental effort for high-risk jobs, fast-moving projects, or growth phases where early warning of issues is critical. The cost of weekly WIP (maybe 2-3 hours per week) is trivial compared to the cost of missing a $50K cost overrun until it's too late to fix.

Annual or quarterly WIP is dangerous. You're operating most of the year with inaccurate financial data, making strategic decisions based on false assumptions, and discovering problems long after you've lost the ability to address them.

The good news is that modern software makes frequent WIP reporting dramatically easier than it was even five years ago. Automated job costing integration, cloud-based collaboration, and mobile cost tracking mean generating weekly or monthly WIP doesn't require days of manual spreadsheet work.

Start with monthly if you're not there yet. Move to weekly for your highest-risk projects. The contractors who run WIP frequently are the ones who consistently hit their margin targets — not because their estimates are better, but because they catch and fix problems early.