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ASC 606 Work-in-Progress (WIP) & Percentage-of-Completion Calculator

This interactive Work-in-Progress (WIP) calculator computes Percentage-of-Completion (PoC) earned revenue, contract assets (underbillings), and contract liabilities (overbillings) under ASC 606 standards. By comparing actual incurred costs against estimated project budgets, financial controllers and project managers can instantly evaluate project burn and billing accuracy, supported by WIP accounting software workflows.

Project Revenue Recognition & WIP Model

Adjust project financial parameters below to calculate real-time earned revenue and billing variances.

Cost-to-Cost Input Method
Real-Time Controller Outputs
Percentage-of-Completion (PoC)
40.0%
Earned Revenue (Recognized)
$200,000.00
WIP Position & Billing Status
UNDERBILLED (Contract Asset): $80,000.00
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The WIP Accounting Formulas: How the Calculator Works

Mathematical mechanics of cost-to-cost revenue recognition under ASC 606.

Model 1

Percentage-of-Completion (Cost-to-Cost)

Calculates completion percentage by dividing actual incurred costs by the total estimated budget:

PoC (%) = (Actual Incurred Costs / Total Estimated Budget) × 100
Purpose: Establishes the exact proportion of performance obligations satisfied to date.
Model 2

Earned Revenue & Billing Variance

Multiplies contract value by PoC to determine earned revenue, then subtracts actual billings:

WIP Variance = (Contract Value × PoC) - Total Billed to Date
Purpose: Identifies whether the project is carrying a contract asset (underbilling) or liability (overbilling).

Understanding Your WIP Results: Assets vs. Liabilities

Balance sheet presentation and cash flow implications under GAAP / ASC 606 standards.

Contract Asset

Underbillings

What it means: Your project team has logged significant labor hours and purchased materials, but invoices have not yet been generated or sent to the client.

Balance Sheet Treatment: Recorded as a Current Asset (Unbilled Receivables / Contract Asset). Chronic underbillings tie up operating capital and indicate potential billing delays.

Contract Liability

Overbillings

What it means: You have collected milestone payments or advance billings from the client that exceed the actual labor and material costs incurred to date.

Balance Sheet Treatment: Recorded as a Current Liability (Deferred Revenue / Billing in Excess of Costs). Represents a performance obligation liability to be fulfilled in future periods.

Eliminate Spreadsheet Errors and Automate Your Monthly WIP Close

While calculators are useful for spot-checking contracts, managing a portfolio of projects using static spreadsheets leaves your finance team vulnerable.

MANUAL SPREADSHEETS VS. AUTOMATED WIP LEDGER
Manual Spreadsheet Calculations
  • Error-prone monthly data entry
  • Disconnected from field timesheets
  • Delayed month-end close cycles
  • Risk of audit restatements
  • Manual GL journal re-entry
TimeTrackerOn Automated WIP Ledger
  • Real-time continuous WIP burn tracking
  • Instant sync with mobile time tracking
  • Automated unbilled revenue pots
  • 100% inspection-ready audit logs
  • Direct sync to Sage Intacct & QuickBooks

TimeTrackerOn automates WIP accounting by uniting mobile time tracking, OCR receipt capture, and direct accounting integrations into a single platform. Track labor burn against active WBS phase codes in real time, monitor continuous WIP ledgers, and synchronize financial data seamlessly with your time and billing software and ERP.

Frequently asked

Questions about WIP calculation

How does this interactive WIP calculator determine Percentage-of-Completion?
The calculator uses the cost-to-cost input method under ASC 606: dividing actual incurred costs to date by the total estimated budget cost to establish the completion percentage, which is then multiplied by the total contract value to determine earned revenue.
What is the difference between an underbilling and an overbilling?
An underbilling (contract asset) occurs when earned revenue exceeds actual billings sent to the client—meaning you have performed work you haven't billed yet. An overbilling (contract liability) occurs when billings exceed earned revenue—meaning you have been paid in advance of work performed.
Why is continuous WIP tracking superior to monthly manual spreadsheets?
Continuous WIP tracking captures labor hours and project expenses as they occur in the field. This prevents month-end surprises, catches project budget overruns before phase caps are breached, and accelerates your financial close cycle. You can also explore alternatives like our Hubstaff alternative.

Automate Work-in-Progress Accounting & Month-End Financial Closes

Eliminate manual spreadsheet WIP schedules, track project labor burn in real time, and streamline your accounting workflows with TimeTrackerOn.

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