Three WIP Numbers That Predict Trouble
For CFOs and controllers: the three numbers on a WIP schedule that flag a job going sideways before it has a name, and why a trustworthy WIP is a systems question before a discipline one.
What you'll learn
- Underbilling trends and what three months of growth means
- Margin fade between periods and where to look first
- Stale cost-to-complete: the quiet report killer
- Why current cost data is the prerequisite for all three
A WIP report nobody trusts is worse than no report. Every decision made on it inherits the fiction.
What's inside
A work-in-progress schedule is the closest thing construction finance has to an early warning system. Read correctly, it flags problems while there is still time to act. Read casually, it is a compliance document the bank asked for.
Three numbers do most of the predictive work.
- 1
1. Underbilling that keeps growing
One month of underbilling is timing. Costs landed before the billing cycle caught up. It happens.
- 2
2. Margin fade between periods
The estimate said 12%. The WIP says 9%. Somewhere between those two numbers is a story, and somebody on that job already knows it: a productivity problem, an unbilled change, a buyout that went the wrong way.
- 3
3. A cost-to-complete nobody updated
Cost-to-complete is the one number on the WIP that requires judgment, which means it requires a human, which means it goes stale.
- 4
The systems question underneath
All three signals depend on one thing: cost data that is current. If field time arrives on Fridays and AP lands whenever it lands, your WIP describes three weeks ago, and none of these warnings fire in time.
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