Value Proposition: The WIP Construction Accounting package connects the “site” with the books: it aggregates actual costs + completion percentages + invoices + retention/guarantee + change orders, producing WIP Schedule and POC and Contract Asset/Liability with JE Log and a traceable Project Closing Pack.

In 20 Seconds: What Will You Get?

• WIP Schedule for each project: Actual Cost + Cost-to-Complete (CTC) + % Completion + Recognized Revenue/Cost.
• Linking revenue and cost to Contract Asset / Contract Liability (Unbilled / Overbilling) instead of aggregated figures.
• Project Profitability Pack: Actual Margin + Expected Margin + Bridge for variances (Overrun/VO/Claims/CTC changes).
• Billing & Collections Reconciliation: invoices/bills versus collections and AR, with a clear cut-off for the period.
• Retention Schedule: Retention by client/project + Due/Release dates + Link to GL.
• VO / Claims Log: Change Orders + Claims + Approval status + Impact on CTC and revenue.
• JE Log for project adjustments + Adjusted TB + Indexed Project Closing Pack for delivery.

CTA related to outputs: Prepare WIP Schedule + POC + Contract Asset/Liability with JE Log within the Project Closing Pack monthly.

Suitable For

• Project Accountant needing a WIP/POC file that links the site to accounting and closes variances monthly.
• Head of Accounting wanting documented reconciliations (JE Log) and linking invoices/collections/retentions to GL.
• Financial Controller needing project profitability (Project P&L) and reviewable Portfolio reports.

Not Suitable For

• A company that does not separate costs by Project/Cost code and does not have budgets/BOQ for each project (WIP/POC will not appear in a linkable format).
• Those looking for alternative engineering “pricing/estimation” for project management; the package is accounting/control-oriented and requires estimation inputs (CTC) from the project team.

Without the Package / With the Package (Short Comparison)

Before Use: 5 Symptoms of Project Closing Disruption

• WIP balance in GL does not match project reports or cannot be broken down by projects.
• Completion percentages come from the site but there is no file linking them to actual costs and CTC.
• Invoices/bills do not match collections or AR due to Retention/discounts/document delays.
• Change Orders (VO) and Claims are managed outside the system with no clear impact on CTC and profitability.
• Profitability is discussed “after the fact” because there is no Schedule showing overruns early.

WIP Construction Accounting: Application Method (3 Steps Without Gaps)

Step 1: Preparation and Report Collection

• Compile Contract / Project Register: Data for each project (Contract value, duration, client, billing terms, retention percentage/value).
• Compile Budget/BOQ or Cost baseline by Cost codes + designate CTC responsible (Project manager / QS).
• Extract Actual costs for the period (Materials/Labor/Subcontractors/Equipment/Overheads) by Project/Cost code.
• Compile Progress / IPC (Completion certificates/approved invoices) + Billing/Invoices + Collections (Cash).
• Extract GL/TB for relevant balances: WIP/Contract assets-liabilities/Revenue/COGS/AR/Retention/Advance from customer.

Step 2: WIP + POC + Reconciliations + JE Log

• Prepare WIP & POC schedule for each project: Actual Cost + CTC + % Completion + Recognized Revenue/Cost + Margin.
• Prepare Billing reconciliation: Certified work/IPC → Billing → AR → Collections with variance explanations (Retention/Timing/Disputes).
• Output Contract asset/liability (Unbilled/Overbilling) and link it to GL (Tie-out).
• Update VO/Claims log and show its impact on CTC and revenue (Approved vs Pending).
• Record project adjustments in JE Log: Reason for entry + supporting document + project/account + approval.

Step 3: Adjusted TB + Profitability Reports + Project Closing Pack

• Issue Adjusted TB after entering entries and approving balances (WIP/Contract assets-liabilities/Revenue/COGS).
• Output management reports: Project P&L, Margin bridge, List of high-risk projects (Overrun/CTC deterioration/Delayed billing).
• Compile indexed Project Closing Pack: WIP/POC + Billing/Retention + VO/Claims + Reconciliations + JE Log + Support Index + Sign-off.

Package Components (Clear Inventory)

1. Contract & Project Register (Master)
   • Practical Purpose: Establishing contract/project data (value, invoice terms, retention, advances, dates) as a single reference.
   • When to Use: At project initiation + update upon any contractual amendment.
   • Resulting Evidence: Approved Register + Contract reference/annexes + Definition of billing/retention policy for each project.
2. Budget / BOQ + Cost Codes Mapping
   • Practical Purpose: Linking budget/BOQ to Cost codes to ensure that Actual costs are read in the same “language” of the project.
   • When to Use: At project establishment + when modifying scope/BOQ.
   • Resulting Evidence: Budget baseline + Mapping sheet + Control totals (Budget by cost code).
3. Actual Cost Collection Pack (Materials/Labor/Subcontractors)
   • Practical Purpose: Collecting actual costs by Project/Cost code (with separation of Subcontractor valuations and indirect expenses).
   • When to Use: Monthly (Month-End) before calculating WIP/POC.
   • Resulting Evidence: Actual cost schedule + linking to ERP/AP/PO/GRN reports + Tie-out to GL.
4. Progress / IPC & Certification Schedule
   • Practical Purpose: Documenting completion percentages/certificates (IPC) and linking them to approved invoices.
   • When to Use: Monthly, especially before issuing invoices and closing revenue.
   • Resulting Evidence: Certified work schedule + References for certificates/approvals + Cut-off for the period.
5. WIP & POC Workbook (Cost-to-Complete / % Completion)
   • Practical Purpose: Calculating WIP and % Completion and linking them to Recognized revenue/cost and position (Contract asset/liability).
   • When to Use: Every Month-End + Expanded for Year-End delivery.
   • Resulting Evidence: WIP schedule for each project + CTC assumptions + Margin analysis + Tie-outs.
6. Billing, AR & Collections Reconciliation
   • Practical Purpose: Linking invoices/bills to AR and collections with variance explanations (Retention/Disputes/Timing).
   • When to Use: Monthly (Month-End) and before any project liquidity report.
   • Resulting Evidence: Reconciliation schedule + Aging for invoices/receivables + List of closeable variances.
7. Retention & Advances Schedule
   • Practical Purpose: Tracking Retentions and customer advances (Contract liabilities) and their release dates linking to GL.
   • When to Use: Monthly + Quarterly follow-up for overdue entitlements.
   • Resulting Evidence: Retention schedule + Advances schedule + Tie-out to related accounts.
8. VO / Claims Log (Change Orders)
   • Practical Purpose: Documenting change orders and claims and their status (Approved/Pending) and linking them to their impact on CTC and profitability.
   • When to Use: Continuously throughout the project + Monthly update during closing.
   • Resulting Evidence: VO/Claims register + References for approvals/memos + Clear financial impact.
9. Project Control Matrix (Key Controls + Evidence)
   • Practical Purpose: Linking control to documentation: Approval of Budget/VO, approval of subcontractor invoice, matching GRN/Invoice, reviewing CTC,… with required Evidence.
   • When to Use: At establishment + Monthly review during closing.
   • Resulting Evidence: Control matrix + Evidence index + Record of control exceptions (if any).
10. JE Log + Project Closing Pack Template
    • Practical Purpose: Documenting project adjustment entries and producing a unified delivery pack.
    • When to Use: Every Month-End (and expanded in Year-End).
    • Resulting Evidence: JE Log + Adjusted TB + Closing Pack index + Support index + Sign-off.

You will use it to produce WIP/POC + Billing/Retention Reconciliations + JE Log → Adjusted TB as a deliverable monthly.

What Should Be Included in the Delivery?

• 01-Inputs: Extracts for the period (Actual costs/GL/TB/AR/AP) + Completion certificates/IPC + Billing/Invoices + Collections + Assumptions (CTC/Rules).
• 02-Contract Register: Contract and project data + Billing terms + Retention/Advances + Annexes/Amendments.
• 03-Budget & Cost Codes: Budget baseline/BOQ + Cost code mapping + Any approved amendments.
• 04-Actual Costs: Actual cost schedules (Materials/Labor/Subcontractors/Overheads) + Tie-out to GL + List of pending items.
• 05-Progress & Certification: % Completion/IPC + Approval references + Cut-off for the period.
• 06-WIP & POC: WIP schedule + CTC assumptions + Recognized revenue/cost + Contract asset/liability for each project.
• 07-Billing & AR: Billing schedule + AR aging + Reconciliation (Certified work → Billing → AR → Collections).
• 08-Retention & Advances: Retention schedule + Advances schedule + Release/payment dates + Tie-out to GL.
• 09-VO/Claims: VO/Claims log + Approval status + Clear financial impact + Document references.
• 10-Controls: Project control matrix + Evidence index + Any control exceptions/notes.
• 11-JE Log & Adjusted TB: JE log (Reason/Supporting/Approval) + Final Adjusted TB copy for the period.
• 12-Pack Index & Sign-off: Closing pack index + Support index + Approval page (period/projects/who approved/date of approval).

After Application (Two Points Only)

• Operational Outcome for the Team: Project closing becomes a fixed path (Actual costs → CTC/POC → WIP → Billing/Retention → JE Log → Adjusted TB) instead of adjusting figures after month-end approval.
• Control/Review Outcome: Traceability: Every WIP number or recognized revenue can be traced back to (Actual costs + IPC + Assumptions + Reconciliations) within the Project Closing Pack with Support Index.

FAQ — Questions Before Purchase

Is the package suitable for any ERP?

Yes, as long as actual costs can be extracted by project/cost code, and GL/TB reports, and invoice/completion data are available. The approach relies on reports, not the system name.

Does it work with companies that have multiple projects at the same time?

Yes. All outputs are built Project-by-Project and then can be aggregated into a Portfolio view (Profitability and Risk summary) using the same approach.

Does it require a BOQ/budget for each project?

For the POC and CTC parts, yes, it requires a Baseline (Budget/BOQ) or at least a Cost baseline that can be updated. Without that, documenting % Completion and linking profitability will be difficult.

Does it include Change Orders (VO) and Claims?

Yes, as documentation and operation: VO/Claims log + Approval status + Impact on CTC and profitability. The final recognition decision follows your company’s policy and approvals.

Does it cover Retention and advances?

Yes. There is a Retention schedule and Advances schedule with due/release dates linking to GL and AR/Billing.

What is the minimum data required to get started?

Project register + Actual costs for the period + Progress/IPC + Billing/Invoices + AR/Collections + GL extracts for relevant balances.

Is it suitable for Month-End only or Year-End as well?

It is primarily Month-End based, and the Project Closing Pack can be expanded at Year-End by adding detailed outputs for review (Expanded Support index + Summary of CTC changes and margin).

Does the package “dictate” the revenue recognition method?

No. It provides Workpapers to document the application (WIP/POC/CTC) according to the recognition policy adopted by your company, with evidence and reviewable adjustments.

Ready to Close Your Projects with a Traceable WIP/POC File?

Outputs: WIP Schedule + POC + Contract Asset/Liability + Project P&L with JE Log within an indexed Project Closing Pack for delivery.