Picture this:

You’ve got a great track record, five solid jobs under your belt this year and a new project lined up that’s ready to go. All you need is the bond to seal the deal.

Then your surety agent, the broker who arranges your bonding, asks for an updated WIP report. But you’re not entirely sure why they need it right now.

A WIP report gives lenders and sureties a current view of a contractor’s project performance, cash position and remaining backlog without requiring them to evaluate every job individually.

See what they’re looking for, and the request makes sense — you’ll know exactly what to pull together and why it matters.

What Is a WIP Report, and What Does It Tell Your Lender?

A WIP report, short for work-in-progress report, is a document that lays out where every active job stands financially at a single point in time.

Think of it as a report card for each project a contractor has going on, rather than one big number that sums up the whole company.

The Numbers Every WIP Schedule Tracks

Every WIP schedule tracks the same handful of numbers for each project:

• The total contract value
• The costs spent so far
• The amount billed so far
• The costs still left to go

From there, the report calculates percent complete and lines it up against how much has been billed.

When those two numbers match up the way they should, a lender sees a company that’s tracking its jobs closely and billing fairly along the way.

What Over-Billing and Under-Billing Tell Banks and Sureties

When billed amounts and percent complete don’t line up, two terms come into play: over-billing and under-billing.

1. Over-billing means a contractor has invoiced more than the work completed so far
2. Under-billing means the crew has done more work than the invoices show

A small gap either way is normal on almost every job. A big or growing gap gets a lender’s attention because it can signal billing delays, changing job estimates or cash flow problems underneath the surface.

Here’s an example:

Say a contractor is halfway done with a $1 million job but has already billed for 75% of it. That extra 25% hasn’t actually been earned yet, even though it’s already been invoiced.

If costs on that job run over budget later, there may not be enough money left to cover them.

What a bank or bonding company cares about is whether a gap like this exists at all, especially a large one, before they commit to a loan or a bond.

Why Both Banks and Bonding Companies Come Back to This Same Report

A bank is in the business of getting repaid.

When a loan officer reviews a WIP schedule, they’re checking whether a contractor generates steady, predictable cash across several jobs at once, rather than leaning on one lucky project to carry the whole company.

That steady cash flow is what tells a bank a line of credit will get repaid on schedule. A contractor whose jobs bill and collect on a predictable rhythm looks like a safe bet for renewing or increasing that credit line.

A WIP report full of big swings — one job way overbilled, another way underbilled — is a red flag before the bank commits more capital.

The bank isn’t grading any single job; it’s looking at whether the whole portfolio of work adds up to a company that can meet its obligations as they come due.

Why Sureties Scrutinize WIP Data Even More Than Banks Do

A bonding company (a surety) takes that same idea and raises the stakes.

A performance bond is a guarantee. When a surety backs a contractor, they’re telling the project owner the job will get finished no matter what. If the contractor defaults on its obligations, the surety may become responsible for ensuring the bonded work is completed according to the terms of the bond.

Because a bond guarantees the work gets done, not just repaid, sureties dig into WIP data even more closely than banks do.

In practice, that comparison looks like this:

An underwriter is the person at the bonding company who evaluates that risk. They compare a contractor’s backlog — meaning all the work still owed on current contracts — against their staff, equipment and working capital. The underwriter is looking for signs that the contractor is stretched too thin to deliver on everything at once.

A contractor whose backlog has outgrown their capacity to staff and fund it is a much riskier bet for a bond, even if that contractor’s individual jobs look fine on paper.

Two Contractors, Two Different Outcomes

Picture two electrical contractors, both bidding on a new $2 million job.

Contractor A submits a WIP report showing five active projects, each billed close to actual progress, with healthy cash on hand.

Contractor B submits a WIP report showing three larger, higher-value jobs that are significantly under-billed, meaning the crews are ahead of the invoicing on every one of them.

On paper, both companies might report similar revenue for the year. But their bank and their surety both look at Contractor B’s numbers and see the same warning sign: a company that could already be short on cash to finish its current jobs, let alone take on a new one.

Contractor A gets approved for a higher bonding limit and sails through its bank’s annual line-of-credit review without much back and forth.

Contractor B gets asked for more documentation, ends up with a smaller bond than hoped for, and hears from its bank about tightening terms on the credit line.

The difference here wasn’t the quality of either contractor’s work. It was the clarity of their numbers.

When Job Cost Reporting Falls Behind, So Does Everything Else

Contractors who track job costs in spreadsheets or scattered files often hit a snag at this exact step, and it has nothing to do with the work on the jobsite. The real issue is time.

Building an accurate WIP report by hand takes hours, and by the time those numbers get pulled together, they’re already out of date. That delay carries a real cost for a contractor trying to move fast.

Outdated or incomplete WIP reporting can:

• Push back a bonding decision by weeks while the surety waits on updated numbers
• Shrink the bonding capacity a surety is willing to offer
• Cause a bank to hesitate on renewing a line of credit
• Add hours of extra work for an accountant chasing down job cost data every quarter

None of that helps a contractor win the next bid. Lenders and sureties move faster when the numbers show up clean and current.

This matters most during a busy season when timing often decides which jobs a contractor can even go after.

How Construction Accounting Software Closes That Gap

That reporting gap is exactly where a purpose-built tool changes the whole equation.

FOUNDATION® construction accounting software pulls job cost, billing and payroll data into one place, so the WIP report reflects what’s happening on every job in real time, rather than what happened last quarter.

Instead of reconciling spreadsheets by hand, a contractor using FOUNDATION can generate WIP, percent-complete and variance reports straight from the same system that already runs day-to-day accounting. That same job cost data feeds CPA reviews too, since an accountant is usually the one packaging these reports for a bank or surety in the first place.

When everything lives in one system, the report matches what’s happening on the ground.

Talk to an Expert About Your WIP Reporting

A clean, current WIP report tells a bank or bonding company the story they need to hear:

1. This contractor’s projects are on track
2. The cash flow behind them is healthy

Getting there depends on job cost data that stays accurate across every active project, from the first job on the books to the newest one.

Keila, construction CFO and a FOUNDATION customer for more than 15 years, said: “We have been using FOUNDATION for over 15 years. We are a construction company with different projects and the job costing feature, especially their WIP reports are perfect.”

FOUNDATION helps contractors pull WIP, billing and job cost reporting straight from their accounting system, so there’s no last-minute scramble before a bonding renewal or loan review.

If you want to see how this fits your company, book a demo and talk with an expert.