Three-Job WIP Review and Closing Roll-forward

Re-estimate the job before rolling the balances

Current forecast total cost = current incurred cost + current cost to finish
Modeled earned revenue = approved contract × incurred cost / forecast total cost
Forecast job profit = approved contract − forecast total cost
Profit change = current forecast profit − prior forecast profit
Net modeled unbilled = current modeled earned revenue − current billings
Recorded billing balance = current billings − current collections
Movement = current cumulative amount − prior cumulative amount

The worksheet uses a cost-to-cost input method for a clearly labelled sensitivity. It does not prescribe revenue recognition or replace a ledger, accountant-approved WIP, contract review or full estimated-loss analysis. Unapproved changes, claims, stored materials, inefficiencies and other accounting exceptions require separate review. A forecast loss is flagged; the tool does not calculate the amount or timing of a required accounting loss provision.

Three jobs with different issues

Example A has a $500,000 contract, a prior $380,000 total-cost forecast, $280,000 current incurred cost and $155,000 remaining cost. Current expected profit is $65,000, down $55,000 from $120,000. Modeled earned revenue is about $321,839, not the earlier illustrative $350,000 management-reported earned figure in the guide. At $350,000 billings, the modeled net position is about $28,161 overbilled; billings of $350,000 less $300,000 collections leave a $50,000 recorded billing balance before reserves.

Example B increases approved contract value from $300,000 to $330,000 while forecast total cost rises from $240,000 to $270,000. Forecast profit remains $60,000. Scope changes can explain a profit movement; do not call every difference estimating fade. Example C has a $200,000 contract and $230,000 forecast cost, a $30,000 forecast loss. Across the three, prior profit is $220,000 and current profit is $95,000: a $125,000 decrease. Review each job before applying any remedy to earnings, price or working capital.

Cutoff and missing-data behavior

Use actual prior/current dates and require the current date to be later. References are unique ignoring case. Each active job needs every numeric field; leave unused jobs entirely blank. Negative costs are rejected, and zero current total cost cannot support this method. Decreases in cumulative costs, billings or collections are preserved and flagged for correction review. Collections above billings produce a negative billing balance requiring a credit/advance reconciliation rather than a negative receivable being silently removed.

Modeled remaining contract revenue plus modeled earned revenue reconciles to approved contract value. It is not a measure of collectible cash or guaranteed backlog profit. A complete review also includes retainage, allowances, commitments, labor capacity, completion dates, unapproved scope, warranty and liquidity. Read the WIP and three-job review guide and working-capital definition. For a public-company example of estimate sensitivity, see EMCOR's 2025 Form 10-K, revenue-recognition note; its policy is not a rule for every contractor.

Primary references

This numerical framework is explained in the companion guide. Contract, accounting and transfer conclusions require the actual evidence and appropriate review.