WIP schedule for a business loan: what goes in it and what a lender reads from it

If a lender has just emailed “please send your current WIP schedule”, you’re probably a contractor, a subcontractor or a firm that bills after the work is done. And your bookkeeper is probably the one who has to build it. Most small businesses don’t keep one all year, so it’s often created in a hurry. It doesn’t need to be complicated, but it does need to be right, because it’s the single document that tells a lender what your bank statements can’t: how far each job has actually got.

What is a WIP schedule, and what does a lender want from it?

A work-in-progress (WIP) schedule lists every open job and compares what you’ve earned with what you’ve billed. Bank statements show cash moving; your profit and loss shows results; the WIP schedule shows the state of the jobs sitting behind both.

A lender reads it for three things:

1. How much of the cash in your account belongs to future work. Deposits and progress payments received ahead of the work are, in effect, owed back as labour and materials.
2. How much work is finished but unclaimed. That’s earned money you haven’t invoiced yet, and a legitimate reason to need a facility.
3. Whether any job is slipping. If cost to date keeps rising against a fixed price, the margin is shrinking even though sales look fine.

It’s most often requested for lines of credit, cash flow loans and larger unsecured facilities for builders, trades, civil and fit-out contractors, and for professional firms that bill in arrears. Smaller facilities are often assessed mainly on bank statements, so not every application needs one. If your business runs on jobs that take months, though, preparing it before anyone asks saves a round of emails.

What columns should the WIP schedule have?

Keep one job per row and one source per column. Mixing sources in a column is how schedules go wrong.

Column	Where it comes from
Original contract value	The signed contract or quote
Approved variations	Signed variations only, not “pending” ones
Revised contract value	Original plus approved variations
Estimated total cost	Your current budget, including the estimate to complete
Cost to date	The job-cost ledger (Xero tracking categories, MYOB job tracking or your job-costing software)
Percentage complete	Cost to date ÷ estimated total cost
Earned revenue	Revised contract value × percentage complete
Billed to date	Invoices and progress claims raised
Over / (under) billed	Billed to date − earned revenue

The percentage-complete maths above is the cost-to-cost shortcut most small contractors use. It mirrors how accounting standards treat revenue that’s earned over time: AASB 15 recognises revenue as a job progresses, and its application guidance lists input methods such as costs incurred as an acceptable way to measure that progress. When earned revenue and billings differ, the accounts carry the difference as a contract asset (earned, not billed) or a contract liability (billed, not yet earned). Your accountant will recognise that: the WIP schedule is the working behind those year-end adjustments.

One practical note. Many small proprietary companies and sole traders run on cash or simplified accounts and never book a WIP balance. That doesn’t stop a lender asking for the schedule; it just means it’s an internal management document, not a set of statements, and should be labelled with its date and who prepared it.

How do you read overbilling and underbilling?

Run each job, then total the overbilled jobs and the underbilled jobs separately. Netting them hides the story.

• Overbilled (billed more than earned). Shown as a liability. Some is normal: deposits and front-loaded claims are standard on commercial work. A lender worries when the overbilled total keeps growing and the work isn’t keeping pace, because the cash in your account is partly someone else’s.
• Underbilled (earned more than billed). Shown as an asset, but it’s cash you don’t have yet. A small amount is just claim-cycle timing. If an underbilled job doesn’t clear within a couple of months, it often means the estimate was wrong or a claim isn’t being served, and lenders ask about it.
• Fade. Compare the margin on each job now against the margin at quote. A job whose estimated cost to complete keeps creeping up is quietly losing money.

Here’s the part many owners miss about timing. Under NSW security of payment law, for example, a person who doesn’t intend to pay a claim in full has 10 business days to give a payment schedule, and the Fair Trading guide sets out payment due dates that run from when the claim is served. The clock starts when you serve a valid claim, not when the work is done. Underbilling you haven’t claimed is therefore the slowest money in the file, and the rules differ between states, so check the one your contracts sit in.

A worked example

Here’s a hypothetical case: a civil and landscaping contractor with two open jobs at 30 September.

	Job A	Job B
Revised contract value	$400,000	$250,000
Estimated total cost	$320,000	$200,000
Cost to date	$192,000	$150,000
Percentage complete	60%	75%
Earned revenue	$240,000	$187,500
Billed to date	$280,000	$150,000
Over / (under) billed	$40,000 over	$37,500 under

Netted, the two jobs look almost balanced. Separated, a lender sees something else. Job A holds a $40,000 deposit-heavy cushion that is really future cost, and Job B has $37,500 of finished work not yet claimed, probably because a variation is unsigned. A sensible note from the bookkeeper beside Job B (“variation 3 awaiting client signature, claim to be served 7 November”) answers the question before it’s asked. The figures are illustrative only.

Which facility does the schedule point to?

The WIP schedule is where a loan type gets linked to a document. The shape of the result suggests the facility.

What the schedule shows	Facility it often points to
Steady underbilling that clears each cycle, with wages and materials paid weekly	A line of credit sized to the claim cycle
A few large jobs with underbilling and long payment terms	A cash flow loan or contract-linked facility
Overbilling growing across many jobs	A conversation first: the lender will want to see how deposits are being used
Cost overruns on a job, margins fading	Working capital to finish the job, with the cause explained
Retentions held after practical completion	Facility sized to the retention release date

For scale, lines of credit, cash flow and other unsecured options generally sit between $5k and $500k, sized on turnover and bank statements. Where property is offered, business loans run from $20k up to $5m. The schedule doesn’t set the amount on its own, but it shows what the money is for and when it comes back. If you’d like a person to read yours against your bank statements, start a short enquiry.

What about professional services and billable-time businesses?

The idea is the same, with fewer columns. For an accounting, engineering, design or other practice, WIP is time recorded but not yet invoiced. A lender will pair it with debtor days, so it can see how long work takes to become cash from the moment it’s done: time worked, then invoiced, then paid. Your aged debtors report shows the second half, and the WIP schedule shows the first. If both columns are lengthening, the facility needs to cover a longer cycle.

How should your bookkeeper tidy the schedule before it goes out?

1. Date it, and align it. Use the same month-end as your bank statements, aged debtors and aged payables.
2. Count only signed variations. Unsigned ones belong in a note, not in contract value.
3. Get a real estimate to complete. The owner or project manager signs off the cost forecast; a stale budget makes everything else wrong.
4. Reconcile cost to date to the ledger. Wages, subcontractors and materials should tie back to the accounts.
5. Reconcile billed to date to invoices. A mismatch is the first thing a lender will find.
6. Explain anything over 90 days. One sentence next to the job is enough.
7. Show retentions separately. Money held until practical completion is a different asset from unbilled work.

The rest of the pack is covered in our guide for bookkeepers on preparing a client’s loan file and the page on management accounts for lenders. Your WIP schedule sits comfortably beside a profit and loss for servicing, and the Link-up checklist builder splits the pack between what the owner provides and what the adviser provides.

Got a WIP schedule and a gap to fund? Let’s look at it together

A WIP schedule can feel like exposing the inner workings of your business. It’s actually one of the most persuasive documents in a contractor’s file, because it shows exactly why the money’s needed and when it comes back. If you’ve got jobs on, unclaimed work or a long wait for payment, we’d like to hear about it.

The enquiry takes about a minute, and asking won’t touch your credit file: there’s no credit check when you first enquire. We don’t fire your details off to a pile of lenders, so your phone stays quiet; a real person reads your situation, links it to the one lender that fits, and calls you, with your bookkeeper or accountant welcome to join. Please fill the form in accurately, including roughly what your open jobs are worth and what’s unbilled, so the first match is the right one.

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