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For electrical contractors, bonding capacity is often the constraint that determines which projects you can chase and which ones stay out of reach. What many contractors don’t realize is that the single most powerful document influencing bonding capacity is not the audited financials, not the bank line, and not even the contractor questionnaire.
It’s your Work-in-Progress (WIP) report.
A clean, accurate WIP tells a story of control, predictability, and financial strength. In the current environment, where underwriters are tightening standards and scrutinizing construction firms more closely than they have in years, this difference matters.
Here’s how smarter WIP reporting can immediately strengthen your bonding profile and how electrical contractors can get there.
What Sureties See When They Look at Your WIP
WIP as the Surety’s Project Scorecard
While your team uses WIP to understand job status, sureties use it as a direct indicator of operational discipline. A WIP schedule shows:
- Original contract and the revised contract; accounting for change orders
- Estimated total cost and cost-to-date
- Revenue earned under percentage-of-completion
- Overbillings and underbillings
- Gross profit to date
An accurate WIP, along with CPA-prepared financials provide great insights to the health of the business. Sureties rely on these numbers to evaluate both job-level performance and overall backlog risk.
How WIP Connects to Bonding Capacity
Most bonding programs begin with adjusted working capital, which is allowable current assets minus current liabilities. But the multiplier a surety applies to that working capital, often 10 to 20 times for aggregate capacity, depends heavily on the quality of information in your WIP.
Underwriters often import your WIP into their own systems and trend performance across jobs. They look for:
- Predictability
- Margin stability
- Realistic cost-to-complete forecasts
- A backlog that your balance sheet can support
A contractor with accurate, timely WIP reporting is inherently a lower-risk account.
The Red Flags Underwriters Spot in WIP Reports
Underwriters look for specific patterns in a WIP report that signal elevated risk. These are the red flags electrical contractors should watch for when evaluating their own reporting.
Late-Stage Underbillings
Underbillings happen when you’ve earned revenue but haven’t billed it yet. Some underbilling is normal; however, significant underbillings on jobs that are 85-90% complete stand out as a major risk indicator.
Why it matters:
- They often signal unapproved change orders or disputes.
- Collection is uncertain, so sureties may discount those amounts.
- Discounted underbillings reduce working capital, which directly reduces bonding capacity.
Electrical contractors face this risk frequently because of design changes, coordination issues, and material-driven billing constraints.
Profit Fade Across Jobs
Sureties closely track whether job margins hold from bid to completion. Consistent margin decline (known as profit fade) raises concerns about:
- Estimating accuracy
- Job cost visibility
- Change-order discipline
- The contractor’s willingness to confront issues early
One fading job can be explained. A fading portfolio signals structural problems and limits how far a surety is willing to stretch your bonding line.
Billing and Cash-Flow Signals
Underwriters pay close attention to:
- Chronic underbillings, which strain cash and suggest slow billing or unresolved scope issues
- Overbillings that do not tie to cash or receivables, which may indicate job borrowing or cash stress
Outdated or Inconsistent WIP
A WIP schedule that is outdated, rushed, or does not reconcile to the general ledger undermines credibility. Underwriters expect:
- Updated WIP at least quarterly
- Clear tie-out between WIP, financials, and backlog
- Accurate retainage treatment
- No Excel-only schedules that conflict with the accounting system
How Electrical Contractors Can Turn WIP Into a Bonding Asset
Increasing bonding capacity has little to do with volume and everything to do with accuracy. Contractors strengthen their position by delivering reliable information on a consistent basis.
Build a Monthly WIP Cadence
High-performing contractors have a predictable rhythm:
- PMs or project accountants provide monthly cost-to-complete updates
- Accounting validates percent complete and earned revenue
- Leadership reviews margin movement and red flags
This cadence gives you accurate reporting and gives your agent and surety confidence that the numbers reflect reality.
Reduce Profit Fade Through Better Forecasting and Change Control
You strengthen your bonding position when your WIP demonstrates control. To do that:
- Start projects with conservative margins
- Document why margins change and adjust WIP in real time
- Follow a disciplined change-order workflow
- Avoid end-of-job write-downs, which signal delayed recognition of issues
Strengthen Working Capital by Improving A/R Quality
Sureties commonly discount A/R older than 90 days, unless clearly identified as retainage. To protect working capital:
- Break out retainage separately
- Address old receivables aggressively
- Prepare “subsequent collections” documentation for renewals
- Resolve disputes proactively
Cleaner A/R = stronger working capital = stronger bonding capacity.
Replace Spreadsheets with Construction-Focused WIP in Sage Intacct
One of the most common barriers to bonding support is a WIP schedule that relies on spreadsheets or contains inconsistent data.
Electrical contractors benefit from moving to systems like Sage Intacct Construction, which:
- Automates percentage-of-completion revenue recognition
- Produces WIP, job cost, and financials from one source of truth
- Tracks retainage properly
- Posts and reverses over/under billing accruals automatically
- Provides WIP history that mirrors how sureties trend your jobs
Quick “Bond-Ready WIP” Checklist
A WIP schedule that supports bonding capacity should:
- Be updated monthly internally and quarterly for your surety
- Reconcile cleanly to financial statements
- Explain major margin movements
- Show minimal late-stage underbillings
- Reflect stable or improving job profitability
- Be produced from a construction system—not spreadsheets
- Give your bond agent confidence to advocate for you
When your WIP tells a clear and consistent story, your bonding capacity grows with it.
Strengthen Your Bonding Position With Alliance + Sage Intacct Construction
Accurate, real-time WIP reporting gives electrical contractors a clear advantage by improving financial visibility, strengthening surety confidence, and supporting larger bonded work. Alliance helps contractors build the systems and reporting structure underwriters trust. If improving your WIP process or expanding bonding capacity is a priority, our team is ready to help.
Schedule a consultation to explore how Sage Intacct Construction can support your goals.
Hear It Directly From the Surety Side
Understanding how sureties interpret your WIP is one thing. Hearing it explained by the people who evaluate contractors every day is another. Our recent webinar brought together construction financial experts and seasoned surety specialists to break down how underwriters assess risk, what they look for inside your WIP, and how contractors can strengthen their position before they request their next bond.
If you want a clearer picture of how your reporting influences real bonding decisions, this conversation is an excellent next step.
