The WIP schedule for one job: the seven numbers and what over- and under-billing say
The controller asks for the theatre-renovation job's WIP row. The project manager sends a billing total and a percentage guessed from the site walk. They have not reconciled the latest cost forecast or asked which completion method the accounts require.
Prepare the job's contract value, forecast total cost, cost to date, progress measure, earned revenue, billings and the comparison between billings and earned revenue. Have the controller specify how those fields are calculated for the company's accounting framework and contract. Under IFRS 15, an appropriate progress measure is needed for obligations satisfied over time; it is not automatically the billing percentage. Your role is to supply reconciled project inputs and explain exceptions.
Join the seven fields on one cutoff
- Confirm the reporting template. Ask what contract value includes, which revenue adjustments apply and whether all fields are cumulative. Use the office's accounting basis for taxes, deposits and disputed changes. The project manager should not choose a different method to improve one month's result.
- Reconcile the contract and forecast. Match approved commercial changes to the current agreement and disclose unresolved items. Bring the latest estimated final cost, with remaining scope and assumptions identified, rather than copying the original budget into the total-cost field.
- Check cost to date. Agree the cutoff with accounts and provide received-work records and missing invoices. Identify costs that may need special treatment for progress measurement. Ask the controller how they should be handled instead of assuming every posted dollar represents transferred work.
- Support the progress figure. Supply the quantities or eligible cost inputs the chosen method requires. Explain any difference from your physical site assessment. A delivered major item, rework or uninstalled material may need discussion even when the arithmetic is straightforward.
- Reconcile earned revenue and billings separately. Have accounts apply the revenue method, then compare that cumulative result with the billing record on the same basis. A difference is a question to explain; it does not show by itself whether the owner has paid.
- Review and retain the row. Identify the reason for a material billing difference and the next commercial action. Save the supporting forecast and approval records with the dated issue so the controller can trace next month's movement.
Common mistakes
- Substituting the amount paid for cumulative billings.
- Using the original budget after the remaining-cost estimate changes.
- Assuming an over-billed row means the surplus cash is available profit.
Checklist
Inputs for the controller
- Reporting cutoff and agreed method.
- Reconciled commercial value.
- Current final-cost forecast.
- Cost and progress inputs with exceptions.
- Separate earned revenue, billings and cash records.
- Explanation of the billing difference.
Check your understanding
The billing claim says 50% while the controller's supported progress measure says 40%. Should you force the two percentages to match?
