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GolfNut72
New Member
July 12, 2020
Solved

Work in Progress - General Contractor - Construction

  • July 12, 2020
  • 2 replies
  • 27 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.

      B
      barronandmcclary
      October 21, 2020

      Hi,

      I followed the instructions to create the WIP report using Job Profitability reports. For some reason Retained Earnings shows up on the report. Retained Earnings is not selected in the account filter and it's jobs from years ago, not in the date range I've selected.

       

      Any ideas?

       

      Kathe

      @Maybelle_S wrote:

      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.

       

      Fiat Lux - ASIA
      Fiat Lux - ASIA
      Level 14
      October 22, 2020

      @barronandmcclary 

      As another option, consider having a construction management app to integrate with your QB Desktop. WIP is a figure generally used to show progress and “Earned Revenue” on a project that is mid-stream. May notice this number in the profitability charts of your Contract Jobs. The app uses this number to show you how far along you are on a project and how much of the contract value you’ve earned on a project before you’ve invoiced the client.

       

      In order to get a WIP value to show on your project, you will need two things:

      1. A Fixed Price Contract – This is necessary so it can show a % of a whole fixed number. 
      2. A Budget Cost – It uses the budget to track how far along the actual cost is vs. how high you expect it to be.

       

      Both of these values are used in the WIP calculation, which is as follows:

      The Actual Cost divided by Budget Cost represents Percentage of Completion, so you can see how far along you are. Then it uses that value times the Contract Value shows the percentage of the contract you should be invoicing based on how much of your budget has been spent. Then, revenue that has already been billed is subtracted, so it doesn’t double up your revenue. A Negative WIP value shows that you have billed the client MORE than the % of Completion times the Contract Value.

       

      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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