About work in progress (WIP)

Many contractors refer to any project in the process of completion as a work-in-progress (WIP). You can print a WIP report for any job to determine the WIP adjustment for percentage complete accounting. Using this adjustment, you can post a transaction that allows you to compare the revenue generated during a given fiscal period to the expenses incurred during the same fiscal period.

WIP also refers to a method of accounting used with speculative projects. Because the contractor owns the project, the contractor must declare improvements to the property as an asset. When the contractor sells the property, he or she then declares the revenue and expense.