What is a work-in-process schedule in an ABL borrowing-base certificate for construction contractors?
A work-in-process (WIP) schedule is a job-by-job report—not a traditional financial-statement line—listing contract price, costs, estimated cost to complete, percentage complete, earned revenue, and billings, producing overbillings (BIE / contract liability) and underbillings (CIE / contract asset). Lenders and sureties read it in the construction financial package and BBC monitoring because progress billings make construction AR hard to lend against.
Last updated: September 12, 2026
Buyer answer: what a WIP schedule is
ABL Advisor states that a contractor's WIP schedule "isn't a traditional part of a financial statement" and "can be an important part of the financial package provided by a contractor," and that "A lender must closely follow the WIP." Pease Bell states that a WIP schedule shows each contract's price, costs to date, estimated cost to complete, percentage complete, earned revenue, and billings, with overbillings as a contract liability and underbillings as a contract asset. UFG Surety states that a WIP schedule is a financial report that tracks costs, revenues and profitability of contracts.
Typical columns and per-job components
Orsurety states that the schedule typically contains the contract price, billings to date, costs incurred to date, estimated cost to complete, and estimated gross profit. Pease Bell says a standard WIP schedule includes, for each open contract, total contract price, total estimated cost, costs incurred to date, estimated cost to complete, percentage complete, earned revenue to date, total billings to date, and the resulting over or under billing. BMF CPA states that the WIP is the heartbeat of any construction company and a financial performance summary of each individual contract, with components such as contract price, estimated total costs, estimated cost to complete, estimated gross profit and costs to date.
Overbillings / underbillings (BIE / CIE) on the schedule
ABL Advisor lists cost in excess of billings ("Under Billings," an asset on the balance sheet) and billings in excess of cost ("Over Billings," a liability on the balance sheet). Construction Executive (Marcum-authored) states that CIE, also referred to as underbillings, is considered a current asset, and BIE, also referred to as overbillings, is considered a current liability. UFG Surety states that large underbillings are shown on the balance sheet as a current asset, and that overbillings occur when a contractor is getting paid for work that hasn't yet been completed. Skip classroom dollar worked examples and ratio-percent benchmarks.
Why lenders and sureties read WIP in the construction financial package / BBC monitoring
CFO Strategies states that banks and sureties rely on the WIP in making credit decisions to provide loans, lines of credit, and bonding. Pease Bell states that the work-in-process schedule is often the most scrutinized document a surety, lender, or auditor will request. Orsurety states that the surety evaluates over and underbillings to confirm the balance sheet is an accurate reflection of the contractor's financial condition. ABL Advisor states that most working capital providers do not lend to the construction industry because of the nature of accounts receivable activity (i.e. progress billings). Bank of America Business Capital states that lenders may not feel comfortable lending against construction accounts receivable due to progress billings, retention or the presence of bonding requirements.
OCC unbilled AR ineligible is a separate BBC rail
The OCC Comptroller's Handbook on Asset-Based Lending lists "Unbilled accounts receivable" among "receivables commonly designated as ineligible."
| Claim | Listed | URL |
|---|---|---|
| A1 ABL: WIP not traditional FS / financial package | The company's WIP schedule, which isn't a traditional part of a financial statement, provides a look behind the veil and can be an important part of the financial package provided by a contractor. | ABL Advisor |
| A2 ABL: lender must closely follow WIP | A lender must closely follow the WIP. | ABL Advisor |
| A3 ABL: progress billings discourage construction lending | most working capital providers do not lend to the construction industry because of the nature of accounts receivable activity (i.e. progress billings). | ABL Advisor |
| A4 ABL: Under Billings=asset / Over Billings=liability | cost in excess of billings ("Under Billings," an asset on the balance sheet) and billings in excess of cost ("Over Billings," a liability on the balance sheet) | ABL Advisor |
| A5 Orsurety: typical WIP columns | The schedule typically contains the following columns, but can contain additional information depending on the software system: the contract price billings to date costs incurred to date estimated cost to complete estimated gross profit | Orsurety WIP |
| A6 Orsurety: primary purpose of WIP | The primary purpose of the WIP report is to allow the contractor to monitor how they are doing on their jobs. | Orsurety WIP |
| A7 Orsurety: surety evaluates over/underbillings | The surety is also able to evaluate billing practices by evaluating the over and underbillings and confirm that the balance sheet is an accurate reflection of the contractor's financial condition. | Orsurety WIP |
| A8 UFG: WIP definition | A WIP schedule is a financial report that tracks costs, revenues and profitability of contracts. | UFG Surety |
| A9 UFG: underbillings = current asset | Large underbillings are shown on the balance sheet as a current asset and can be problematic as it means a contractor is not getting paid for work that has been completed. | UFG Surety |
| A11 BMF: WIP heartbeat / per-contract summary | The work in process schedule (WIP) is the heartbeat of any construction company and needs to be accurately maintained and analyzed. The WIP is a financial performance summary of each individual contract that the company enters. | BMF CPA |
| A12 BMF: WIP components | There are many items that affect the components of the WIP, such as contract price, estimated total costs, estimated cost to complete, estimated gross profit and costs to date. | BMF CPA |
| A13 Pease Bell: Quick-answer WIP definition + over/under | A WIP schedule shows each contract's price, costs to date, estimated cost to complete, percentage complete, earned revenue, and billings. Overbillings (billings in excess of costs and estimated earnings) mean you have invoiced more than you have earned and represent a contract liability. Underbillings (costs and estimated earnings in excess of billings) mean you have earned more than you have invoiced and represent a contract asset. | Pease Bell |
| A14 Pease Bell: most scrutinized document | the work-in-process schedule is often the most scrutinized document a surety, lender, or auditor will request. | Pease Bell |
| A15 Pease Bell: standard WIP columns | A standard WIP schedule includes, for each open contract: the total contract price, total estimated cost, costs incurred to date, estimated cost to complete, percentage complete, earned revenue to date, total billings to date, and the resulting over or under billing. | Pease Bell |
| A16 CFO Strategies: banks/sureties credit decisions | “The WIP,” which is the work in process schedule (sometimes called the work in progress or the contracts in process schedule), helps contractors determine their profitability by job while tracking and forecasting their job costs. … banks and sureties rely on the WIP in making credit decisions to provide loans, lines of credit, and bonding. | CFO Strategies |
| A17 ConstructionExec (Marcum): CIE/BIE asset/liability | CIE, also referred to as underbillings, is considered a current asset. / BIE, also referred to as overbillings, is considered a current liability. | Construction Executive |
| A19 OCC: Unbilled AR commonly ineligible (FAQ/rail only) | The following are characteristics of receivables commonly designated as ineligible: … Unbilled accounts receivable. | OCC ABL handbook PDF |
| A20 BofA: construction AR progress billings/retention/bonding | in the case of a construction company, lenders may not feel comfortable lending against accounts receivable that could be difficult to collect due to progress billings, retention or the presence of bonding requirements. | Bank of America Business Capital |
Frequently asked questions
What is a work-in-process schedule in an ABL borrowing-base certificate for construction contractors?
A work-in-process (WIP) schedule is a job-by-job report—not a traditional financial-statement line—listing contract price, costs, estimated cost to complete, percentage complete, earned revenue, and billings, producing overbillings (BIE / contract liability) and underbillings (CIE / contract asset). Lenders and sureties read it in the construction financial package and BBC monitoring because progress billings make construction AR hard to lend against.
What columns does a construction WIP schedule typically include?
Orsurety states that a WIP schedule typically contains the contract price, billings to date, costs incurred to date, estimated cost to complete, and estimated gross profit. Pease Bell says a standard WIP schedule includes, for each open contract: the total contract price, total estimated cost, costs incurred to date, estimated cost to complete, percentage complete, earned revenue to date, total billings to date, and the resulting over or under billing.
How do banks and sureties use a WIP schedule when underwriting credit or bonding?
CFO Strategies states that banks and sureties rely on the WIP in making credit decisions to provide loans, lines of credit, and bonding. Pease Bell states that the work-in-process schedule is often the most scrutinized document a surety, lender, or auditor will request. Orsurety states that the surety evaluates over and underbillings to confirm the balance sheet reflects the contractor's financial condition.
Does OCC treat unbilled accounts receivable as commonly ineligible for ABL?
Yes. The OCC Comptroller's Handbook on Asset-Based Lending lists "Unbilled accounts receivable" among "receivables commonly designated as ineligible." That is a borrowing-base eligibility rail.
Why do lenders hesitate on construction AR in an ABL borrowing base?
ABL Advisor states that most working capital providers do not lend to the construction industry because of the nature of accounts receivable activity (i.e. progress billings). Bank of America Business Capital states that lenders may not feel comfortable lending against construction accounts receivable due to progress billings, retention or the presence of bonding requirements.
Related
- Before binding an ABL revolver, which AR lines are ineligible and which get carved back at term sheet?
- Do progress billings count toward the borrowing base before an ABL revolver binds?
- Does unbilled cost-in-excess count toward the borrowing base at term sheet?
- Why is construction AR harder to finance than manufacturing AR at term sheet?
- What is the difference between a field exam and monthly borrowing-base reporting?
- What is the difference between billings-in-excess liability and unbilled asset on a contractor balance sheet?