The estimates are the hard part. Percentage-of-completion is only as accurate as the cost-to-complete estimates behind it, and those estimates should be revisited regularly, not set once at the start of a job and forgotten. A subcontractor ' s price increase, a permitting delay, or a scope change can all shift the math. Contractors who update their WIP schedules monthly tend to catch margin erosion while there ' s still time to do something about it.
Where This Tends to Go Sideways
A few patterns show up again and again:
Overly optimistic cost estimates. It ' s natural to assume a job will come in on budget. POC accounting punishes that optimism by overstating profit early, then forcing a correction later. Inconsistent job costing. If labor, materials, and overhead aren ' t tracked consistently across jobs, the WIP schedule is only as reliable as the weakest link. Treating the WIP schedule as a year-end task. By the time it ' s reviewed once a year, the information is stale and the chance to course-correct mid-project is gone.
None of these are complicated problems to prevent. They just require a system, and a habit of checking it.
Getting Started( Or Getting Better)
Contractors don ' t need to overhaul their whole accounting system to improve here. The starting point is usually a straightforward one: build( or clean up) a WIP schedule, set a monthly cadence for updating it, and involve project managers in refining cost-to-complete estimates, since they often see problems on the ground before the numbers do.
Getting the mechanics right pays off well beyond the financial statement or tax return. It ' s one of the clearest ways for a contractor to know, in real time, whether a job is actually making money.
A Rea advisor can help you build a WIP process that holds up under scrutiny and gives you a clearer read on every job in progress. Reach out to our team at reaadvisory. com / contact to talk through what that could look like for your business.
Clay Matthews
Supervisor clay. matthews @ reaadvisory. com
234-249-3483
Save the Date: Rea Manufacturing Education Day
Three cities. One conversation about where AI is actually taking manufacturing.
Rea is bringing manufacturing leaders together this fall to talk through what AI means for ERP decisions, workforce planning, and day-to-day operations, plus economic outlook and real perspective from other manufacturers in the room.
Wooster— Oct. 2 | The Arden Shisler Conference Center Dublin— Oct. 23 | Rea Dublin Office Cleveland— Oct. 30 | Holiday Inn Independence
Pick the date and location closest to you and join the conversation. CPE available.
AGENDA & REGISTRATION: REAADVISORY. COM / MANUFACTURING-DAYS-2026
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