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Two essential tools, one big difference: timing and visibility. This is Part II of a contractor’s 8-part guide to tracking job progress, profitability, and financial health while the work is still underway.
- Part I: What is WIP Reporting and Why it Matters
- Part II: What’s the Difference Between Job Cost and WIP?
- Part III: How to Get Started with WIP
- Part IV: Understanding Key WIP Metrics (Earned Revenue, Over/Under Billings, FCAC)
- Part V: The Role of Project Managers in Accurate WIP Reporting
- Part VI: What to Look for in a WIP Reporting Solution
- Part VII: How Sage Intacct Automates WIP Reporting and Saves You Time
- Part VIII: How to Transition from Excel to Sage Intacct WIP Reporting?
If you manage construction projects, you’ve likely heard both terms: job costing and WIP reporting. And while they’re closely related—and sometimes even use the same data—they serve very different purposes.
Think of job costing as the foundation. It’s where you track how much money you’re spending. WIP reporting builds on that foundation to show what those costs mean in terms of progress, revenue, and profitability—while the job is still in motion.
Let’s break it down.
What Is Job Costing?
Job costing is all about tracking the actual costs of a project—down to the penny.
Every labor hour, piece of material, equipment rental, and subcontractor expense gets logged and assigned to a specific job, and often to a specific cost code within that job. The goal is to know exactly where your money is going, and how closely those costs align with your estimate or budget.
With job costing, you can answer questions like:
- How much have we spent on concrete for Job 104?
- Are we exceeding our labor budget for the framing phase?
- What’s the total cost of this project so far?
This level of detail is critical for managing day-to-day project expenses. But while job costing tells you what you’ve spent, it doesn’t automatically tell you how far along the project is or whether you’ve earned the revenue to match those costs. That’s where WIP comes in.
What Is WIP Reporting?
WIP stands for Work in Progress, and WIP reporting takes job costing to the next level.
Instead of just showing what’s been spent, a WIP report measures job performance over time. It compares actual costs to forecasted costs to determine how much of the job is complete—and how much revenue you’ve earned to date, based on that progress.
WIP reports help you spot:
- Overbilling (you’ve billed more than you've earned)
- Underbilling (you’ve earned more than you've billed)
- Potential profit fade
- Jobs running behind (or ahead of) schedule or budget
WIP reporting also gives you a clearer financial picture for your company as a whole. Instead of waiting until a job wraps to measure profitability, WIP lets you recognize revenue as work gets done—month by month.
The Key Difference: Timing and Insight
The big difference between job costing and WIP reporting comes down to timing and visibility.
In short:
- Job costing tells you what’s happened.
- WIP reporting tells you where you’re headed.
Why You Need Both
If you’re only using job costing, you might know that you’ve spent $500,000—but have no idea if that’s 50% of the job or 80%. Without context, it’s hard to know what to do next. WIP provides that context.
Together, these tools help you:
- Forecast final project costs
- Recognize revenue more accurately
- Identify issues early (before they hit your bottom line)
- Build trust with financial stakeholders through consistent, transparent reporting
And when they’re integrated—especially within a modern system like Sage Intacct Construction—you can stop chasing spreadsheets and start managing with confidence.
Turn Your Numbers into Insight
At Alliance Solutions Group, we help construction companies move beyond basic job costing and manual spreadsheets. With Sage Intacct Construction, we’ll show you how to connect your cost data to real-time forecasts and generate accurate WIP reports with ease. If you’re ready to see where your jobs really stand, contact us for a personalized demo.
