What is Work-in-Progress (WIP) in Construction?

With years of experience in construction accounting, Vanessa Conlin, a Principal at SVA, has helped countless contractors make sense of their financial data and project reporting. Her expertise lies in translating complex accounting concepts into practical tools that improve business visibility and decision-making.

In this Q&A, she shares her perspective on what WIP means, how it’s calculated, and why it’s a cornerstone of healthy project management.

What are Some of the Most Common Challenges Contractors Face with WIP?

According to Vanessa, one of the biggest pitfalls is inaccurate cost tracking or estimated total costs. “Those estimates drive everything,” she says. “If they’re off, the whole report is off.”

Another issue is misalignment between accounting and project management teams. Project managers may feel a job is 75% complete, while the financials suggest something closer to 60%. “That disconnect happens all the time,” Vanessa says. “It’s not that one side is wrong, it’s that they’re working from different data.”

Timing also plays a role. “By the time project managers and accountants meet, they’re often looking at last month’s numbers,” she explains. “There’s usually a lag, and that means decisions are being made based on outdated information.”

To address that, she points to software and systems that integrate field and accounting data in real time, reducing delays and improving accuracy.

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What are Some Best Practices for Effective WIP Management?

Vanessa’s first recommendation is consistency. “Reconcile your WIP regularly: monthly at a minimum,” she advises. Keeping schedules up to date ensures that reports reflect the latest information.

She also encourages companies to use integrated construction accounting software, which links field operations with financial reporting. “That way, you’re not relying on manual updates or spreadsheets,” she says.

Collaboration is equally important. “Accounting and project management teams need to communicate,” Vanessa adds. “And training project managers to understand how their decisions affect financial outcomes can make a big difference.”

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Any Final Advice for Construction Businesses?

Vanessa emphasizes that understanding WIP is about more than compliance: it’s about control. “When you know where your projects stand financially, you can make smarter decisions,” she says. “It’s not just about the numbers. It’s about managing your business proactively and maintaining trust with lenders, bonding companies, and your own team.”