A Work in Process schedule (WIP) helps contractors document the progress of their project. A WIP also helps the surety company to evaluate the progress of the project as well. A well-documented WIP can help the contracting company earn future approval for surety bonds.
In a general WIP, some of the things documented are the contract price, billings to date, costs incurred to date, estimated completion cost and estimated gross profit. These help the contractor show that they are completing the project on time and without additional costs.
The reasons a WIP is important for a surety company is that it helps to monitor profitability, any errors and profit fade and gains that may happen. The surety company is also able to evaluate billing practices of the contracting company. A WIP also helps to back up the contractor’s financial strength on the project.
It is important to have Certified Public Accountant (CPA) organize the contractor’s financial records, to provide to the surety company.
Summary:
- A WIP is important for both the contractor to stay on schedule and document any shortcomings. It is important also for the surety company to monitor and evaluate progress and any discrepancies.
- A proficient WIP can help to ensure future approvals for surety bonds.
- CPA provided financial documents will help to ensure that the project is financially backed by sufficient funds.
