WIP Reports: Construction Company Success Example

If you or someone you know has ever had a leg injury that called for the use of crutches to move about, you know how difficult and time-consuming that can be. Typically, over time and with proper physical therapy, there comes a day when functionality is restored, and the crutches can be ditched.

But wouldn’t it be a shame if the doctor who prescribed the crutches never explained that they are a temporary fix, that physical therapy is needed, and that normal mobility will be restored?

Unfortunately, there are professionals (in the accounting world) very similar to the doctor mentioned above, who either don’t know how to treat the patient or are not healers but rather crutch providers.

What follows is an example of a construction business that had been saddled with some crutches (a pretended profit margin) impeding mobility.   

A WIP Success Example in the Tile & Marble Trade

When the custom tile and marble installation company in Florida first came to us, they were frustrated. Their accounting firm adjusted their Work in Progress (WIP) Report each month based on an assumed 35% profit margin – regardless of the actual job details. Deep down, they knew it didn’t reflect reality, but they weren’t sure how to do it any differently.

That’s where we stepped in.

Together, we built a new way forward: one rooted in accuracy, not assumption.

We helped their team shift from relying on blanket profit expectations to building accurate budgets for each project. By doing that, they began to calculate the true Percentage of Completion – not based on guesswork but grounded in the actual costs incurred and work completed. Suddenly, their WIP reports started to tell the real story of each job.

The WIP Success Results Example?

Here it is!

1. They could clearly spot jobs that were falling behind or losing money and address issues before it was too late.

2. They could see which projects were ahead of schedule or exceeding expectations and use that knowledge to plan more confidently.

3. Most importantly, they learned to track over- and under-billings – a critical skill in understanding why cash in the bank doesn’t always mean profit in the books.

That awareness was a turning point. Instead of spending cash that belonged to future job costs, they began to make smarter decisions, thereby preserving their margins and protecting the business.

WIP Success Results!

Now, this team isn’t just great at tile and marble installation; they’re also becoming experts at understanding the financial heartbeat of every project they run. They ditched the crutches, and their mobility is being restored!

WIP Success Results Conclusion

If your accounting professional suggests using crutches because of an injury (for example, you must have a WIP Report to satisfy a bonding agent or comply with tax reporting requirements,) that’s fine. Do what you must do. But!

But understand that the guesstimate used in preparing that report is only a crutch. You will need to do the hard part (similar to physical therapy) of working with your accounting professional (like a physical therapist) to compile WIP Reports that allow you to move from spending cash that belongs to future job costs to making smarter decisions that preserve your margins and protect your business.

WIP Success Results – Shameless Plug

We’ve given you an example of just one of our clients that we’ve worked with to help ditch the crutches.

We’re good at it!

Unfortunately, we’ve noticed that many of our clients come to us when they discover that their accounting professional either didn’t know how or was not prepared to do the hard work of compiling actual job details, instead relying on assumed profit margins or pure guesstimates. Our goal is to ensure our clients not only ditch the crutches but also regain full mobility.

If you’re ready to ditch the crutches and do the hard part (just like you would in physical therapy), we invite you to get in touch and learn how your construction company can have WIP Success Results that lead to Running With the Big Dogs.

Ambitious Construction Contractors look to The Profit Constructors to provide advocacy in dealing with:

• Clients and customers

• Employees and subcontractors

• Vendors and service providers

• Governmental entities

Working with The Profit Constructors gives Construction Contractors the means to organize their operations in ways that help them:

• Remain informed

• Avoid hassles

• Reduce risks

• Be future-ready

Ready for action? Or want to know more? Get in touch today to schedule a complimentary discovery call. 866-629-7735