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GolfNut72
New Member
July 12, 2020
Solved

Work in Progress - General Contractor - Construction

  • July 12, 2020
  • 2 replies
  • 49 views

I'm looking for articles, white papers, guidance, best practices for managing Work in Progress for a General Contractor.  For the past several years he was been coding a lot of expenses and payments to WIP but it is never closed out.  It looks like I will have to go back several years and closeout completed jobs and make sure at year-end jobs are correctly progressed (to the best of our ability).

 

The GC is using QBDT 2019 Pro.

 

Any information would be helpful

 

Thank you

EJ

 

    Best answer by Maybelle_S

    Thanks for reaching out to the Community space, @GolfNut72.

     

    Currently, we don't have a WIP feature in QuickBooks Desktop (QBDT). However, we can create an account called Work in Progress. This way, we can track the revenue (as liabilities) and costs (as assets) until the end of the job. Here's how:

     

    Step 1: Create an account

    1. Go to the Lists menu, and select Chart of Accounts.
    2. Click the Account button, and then select New.
    3. Select Other Current Asset for the account type.
    4. Click Continue.
    5. For the Account Name, you can put Work in Progress.

    I'd also recommend reaching out to an accountant to help you choose the right account.

     

    Step 2: Change the item account

    1. Go to the Lists menu, and select Item List.
    2. Change the expense account on your service items to the asset account you set up above.
    3. Add Other Charge items.
    4. Transfer out of WIP as the account and the amount in the description should be positive.
    5. Make sure to use the Items tab instead of the Expenses on all your transactions.

    However, if you use Job Profitability reports, we can filter them to include your WIP account. I'll guide you how:

    1. Go to the Reports menu.
    2. Select Custom Reports and then Summary.
    3. Click the Customize Report tab, then select Filters.
    4. Select the Account drop-down arrow, then choose Multiple accounts.
    5. Verify all income and expense accounts and your WIP account, then click on OK twice.

    Once done, generate a report to track the amount in WIP by the job.

    1. Go to the Reports menu.
    2. Select Custom Reports and then Summary.
    3. Click the Customize Report tab, then select Display.
    4. Select the Display columns by drop-down arrow, and then choose Account list.
    5. Click the Display rows by drop-down arrow, and then choose Customer.
    6. Select the Filters tab.
    7. Click the Account drop-down arrow, and then choose your WIP account.
    8. Click OK once done.

    When the projects complete, make the invoice or sales receipt for the sales price. Then, add the two charged items to ensure a negative amount for Transfer into COS. The invoice end total must match the sales price.

     

    I've also added these articles about customizing reports and job costing:

    Feel free to drop a comment below if you have other questions. I'm always here to help you some more.

    2 replies

    M
    Maybelle_SQuickBooks TeamAnswer
    QuickBooks Team
    July 12, 2020

    Thanks for reaching out to the Community space, @GolfNut72.

     

    Currently, we don't have a WIP feature in QuickBooks Desktop (QBDT). However, we can create an account called Work in Progress. This way, we can track the revenue (as liabilities) and costs (as assets) until the end of the job. Here's how:

     

    Step 1: Create an account

    1. Go to the Lists menu, and select Chart of Accounts.
    2. Click the Account button, and then select New.
    3. Select Other Current Asset for the account type.
    4. Click Continue.
    5. For the Account Name, you can put Work in Progress.

    I'd also recommend reaching out to an accountant to help you choose the right account.

     

    Step 2: Change the item account

    1. Go to the Lists menu, and select Item List.
    2. Change the expense account on your service items to the asset account you set up above.
    3. Add Other Charge items.
    4. Transfer out of WIP as the account and the amount in the description should be positive.
    5. Make sure to use the Items tab instead of the Expenses on all your transactions.

    However, if you use Job Profitability reports, we can filter them to include your WIP account. I'll guide you how:

    1. Go to the Reports menu.
    2. Select Custom Reports and then Summary.
    3. Click the Customize Report tab, then select Filters.
    4. Select the Account drop-down arrow, then choose Multiple accounts.
    5. Verify all income and expense accounts and your WIP account, then click on OK twice.

    Once done, generate a report to track the amount in WIP by the job.

    1. Go to the Reports menu.
    2. Select Custom Reports and then Summary.
    3. Click the Customize Report tab, then select Display.
    4. Select the Display columns by drop-down arrow, and then choose Account list.
    5. Click the Display rows by drop-down arrow, and then choose Customer.
    6. Select the Filters tab.
    7. Click the Account drop-down arrow, and then choose your WIP account.
    8. Click OK once done.

    When the projects complete, make the invoice or sales receipt for the sales price. Then, add the two charged items to ensure a negative amount for Transfer into COS. The invoice end total must match the sales price.

     

    I've also added these articles about customizing reports and job costing:

    Feel free to drop a comment below if you have other questions. I'm always here to help you some more.

      T
      Thilmony
      September 20, 2023

      Can someone give instructions like Maybelle gave, only for QBO?  I am using the Plus version.

      K
      KayePeQuickBooks Team
      QuickBooks Team
      September 20, 2023

            Hi.  Our business is flipping homes.  The reason I want to use a WIP account is so my balance sheet stays accurate.  I set up an account named Work in Progress, with the account type being other current asset.  It has to be an asset and not an expense.  For example, If I buy a house for 100k, and put 50k into it, I want that 150k to show up on my balance sheet as an asset, since I own it and will recover it when I sell the property.  The problem I am having is with the reporting.  I cannot get the projects function to work, as it deals with income and expenses.  My WIP entries will not show up there since they are assets and not expenses.  Maybe I don't have something set up right.

           I have attached an article that shows a work around for this problem using QBDT.  I understand the article, I would just like to do what the article says in QBO Plus.  The terminology is different, and the reporting functions in QBO are not the same.  Can you help me do everything this article is discussing?  Thanks for your time.

       


      Hi @Thilmony,

       

      I am happy that you provided us with some information regarding your concern.

       

      As of now, we're unable to add the assets to the projects. As a workaround, I recommend integrating a third-party app that allows work-in-progress (WIP) tracking. I'll show you how.

       

      Step 1: Find the App

      1. Sign in to your QuickBooks Online account.

      2. On the left navigation menu, select the Apps tab.

      3. In the magnifying glass bar, search the app you want to connect to or click the Browse category.

       

      Step 2: Download an app

      1. Choose the app that you want to download.

      2. Click the Get App Now

      • The button will display Opt-in Now if the app is in beta testing.
      • The button will display Learn More if the app requires you to connect the app to their system.

      3. To connect to your QuickBooks Online, you need to authorize the app.

      4. In connecting and setting up the settings of your choice, kindly follow the remaining steps.

       

      In managing your third-party app connections, you can check it in the My Apps tab.

       

      Then, I suggest using a journal entry to enter the assets manually and the transactions made for the particular property. To avoid messing up your books, I recommend reaching out to your accountant.

       

      These are the steps in creating a journal entry:

      1. Go to +New and then select Journal Entry.
      2. On the first line, select an account from the Account field. Depending on if you need to debit or credit the account, enter the amount in the correct column.
      3. On the next line, select the other account you're moving money to or from. Depending on if you entered a debit or credit on the first line, enter the same amount in the opposite column.
      4. Check the amounts - you should have the same amount in the Credit column on one line and the Debit column on the other.
      5. Once done, click Save and close.

      Additionally, QuickBooks Online allows you to track your journal entries accurately in QuickBooks Online. To do so, you can delete the transactions added by mistake or update them if necessary. 

       

      If I can be of any other help in managing your QuickBooks transactions, you can always tag my name below. I'll be more than happy to assist.

      W
      WIPReports
      April 29, 2026

      For anyone landing here looking for QBO specifically (which several people in this thread asked about): QBO does not have a native WIP report.

      The QBO approach that gets you closest:

      1. Create sub-customers for each job (under a parent customer for each GC/owner)
      2. Tag every bill, expense, and invoice to the correct sub-customer
      3. Run "Profit and Loss by Customer" for job cost visibility

      But that only gives you costs and billings. For a real WIP schedule you also need contract value and cost-to-complete estimates, neither of which QBO tracks. Most firms end up maintaining an Excel spreadsheet alongside QBO, pulling numbers manually each month.

      For home flipping with QBO Plus: WIP should be on the balance sheet as an asset until sale. In QBO, create an Other Current Asset account called "WIP" or "Construction in Progress." Post acquisition costs and rehab expenses there via journal entries. When you sell, JE the accumulated costs from WIP to COGS. Your WIP schedule (showing each property's status) will need to be maintained outside QBO.

      I built a tool that automates the QBO-to-WIP schedule pipeline for construction companies (wipreports.com). It connects to QBO, collects cost-to-complete from your PMs via email, and generates a professional WIP PDF. First month free.

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