WIP Reporting For Shopfitters: A Five-minute Primer

If you run finance or operations at a UK shopfitter, you already know the drill. A contract feels profitable until the final account. Then the production manager admits a fortnight of factory time was uncharged, the QS confirms three variations never got valued, and 5% retention is sitting in a debtor that will not clear for another twelve months. By the time the P&L catches up, the margin is gone.

A properly-kept Work In Progress (WIP) figure is the single most effective way to stop that happening. This is a five-minute primer on how to produce one — spreadsheet-first, with the mistakes to avoid flagged along the way.

What WIP actually means for a shopfitter

Work In Progress is the value of work you have performed but not yet invoiced — or invoiced but not yet earned. On a shopfitting contract it blends three moving parts:

1. Costs incurred to date — factory labour, site labour, materials, subcontractors and plant.
2. The revenue you have earned against those costs — effectively the contract value multiplied by the percentage of physical completion.
3. Anything billed or received that is still ahead of what has actually been delivered.

Get those three numbers right and WIP is straightforward: earned revenue minus invoiced revenue equals WIP. Positive if you have done work you have not yet billed; negative if you have billed for work you have not yet done. Get any of them wrong and your WIP will drift — and so will the margin forecast sitting underneath it.

Why shopfitters struggle with WIP

Three pieces of the shopfitting business model make WIP harder than it is in general contracting.

• Stage payments. Most shopfitting contracts invoice on milestones — deposit, factory completion, delivery, practical completion, final account. A big milestone invoice will push you apparently ahead of earned revenue one week, then behind the next. Confuse the billing profile with the earnings profile and the WIP number moves for reasons that have nothing to do with real job progress.
• Variations. On fit-out work, the quoted scope is rarely what gets built. Additional doors, mid-contract finish changes, late electrical provisions — every instructed variation is a cost and a revenue line, and if it is not priced, agreed and logged promptly, it sits invisible in your WIP. The classic pattern: costs land in the ledger, revenue does not.
• Retention. 3–5% retention on each application means invoiced revenue is always slightly understated against earned, for the life of the contract and then the defects liability period. A WIP calculation that does not separate retention from ordinary debtors will double-count cash-flow pressure.

Each is solvable. Together, they are the reason most spreadsheet WIP reports drift within a fortnight of the quarter-end.

Three ways to get a rough WIP number in a spreadsheet

If you do not have specialist software — or you want a cross-check against one — here are three methods in increasing order of accuracy.

Method 1: Cost-to-complete

For each live contract, capture total contract value, total forecast cost, and cost-to-date. Cost-to-date divided by forecast cost gives percentage complete. Multiply the contract value by that percentage to get earned revenue, then subtract invoices raised. This is the fastest route to a defensible WIP number and is the method your auditor will recognise.

Method 2: Earned value by line

Rather than a single percentage per contract, break the contract into cost codes — factory labour, site labour, materials, subcontractors, prelims — and mark each one off as fully or partially earned. More accurate, more time-consuming, and works well when you have a half-decent estimate to measure against. Useful when contracts are long or heavy in factory work.

Method 3: Percentage-complete by milestone

For each contract, list the payment milestones and attach a physical-progress percentage to each. PC-milestones tend to be coarse-grained (deposit 20%, factory 40%, site 70%, PC 95%, final account 100%), so this method gives a cruder WIP figure than the other two — but it is the one most Ops Directors can do in their head on a Friday afternoon.

Whatever method you pick: apply it consistently every month, and reconcile the WIP figure back to your cost ledger and your sales ledger. Any drift between the three is where your margin has quietly leaked.

Where spreadsheets break

Three recurring failure modes:

• Stale cost data. If you are pulling cost-to-date from Sage or Xero once a month, your WIP is already a month out of date. By the time you spot a problem contract, three weeks of recoverable cost may have walked out the door.
• Variations logged in the wrong place. Variation orders typically live in an operations spreadsheet, a QS log, or the contracts manager’s head. Until they land as agreed revenue in the accounts, they will not appear in your earned-revenue figure — even though the cost of delivering them is already in the ledger.
• Retention double-counted. Shopfitter spreadsheets frequently treat retention as a live debtor. On a £2m contract, 5% retention is £100k — and treating that as working capital you can rely on in month three leaves a very large hole come month fifteen.

None of these is a spreadsheet bug. They are architectural limits of running a live contract position in a workbook that updates monthly.

How Contract Controller automates it

Contract Controller is built for the shopfitter-specific version of this problem. Costs land against the job the moment a factory or site timesheet is captured; variations are priced and logged alongside the original contract value; retention is held as its own class of debtor rather than mixed in with general aged-debt. The WIP position is live — not month-end — and the underlying breakdown by contract, milestone and cost code is available on screen without rebuilding a pivot table.

The practical effect: Finance Directors get a WIP number they trust on any given Monday morning, not the third week of the following month. Ops Directors can see which contracts are earning ahead of billing (good — invoice sooner) and which are billing ahead of earning (risky — do not spend the cash yet).

In short

A good WIP figure is the difference between running a shopfitting business on evidence and running it on hope. You can get there in a spreadsheet if you are disciplined; you will get there much faster with a system that was built for the way shopfitters actually work.