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Tracking WIP: Knowify vs. QuickBooks Online

Production abstraction displaying revenue, committed costs, and P&L | Tracking WIP: Knowify vs. QuickBooks Online | Knowify

In the fast-paced world of construction project management and construction accounting, understanding the financial health of ongoing projects is crucial for success. 

Work in progress (WIP) reports are one of the best tools available for doing just that. 

Traditional accounting software like QuickBooks provides basic WIP functionalities but falls short when it comes to detailed Work in Progress (WIP) management. 

This is where specialized tools like Knowify come into play, offering a contractor-centric approach to managing project profitability. 

Let’s look more at WIP management and explore how Knowify can pair with QuickBooks to give contractors the accurate, real-time WIP reporting they need.

Understanding WIP in construction project management

Work in Progress (WIP) is an important metric in project management and construction accounting, representing the value of unfinished projects. It plays a significant role in assessing a project’s financial health, profitability, and progress. Proper WIP management allows businesses to:

  • Accurately track costs against budgets
  • Adjust invoicing to reflect the actual work done
  • Improve profitability forecasting and management

How WIP can help contractors improve profitability

The goal of effective WIP management is to align invoicing with the actual work completed, aiming for a WIP number that’s as close to zero as possible. This alignment ensures that businesses invoice precisely for the work done, neither over nor under-billing, thereby maintaining accurate profitability forecasts and managing client expectations effectively.

QuickBooks: A starting point for WIP tracking

QuickBooks offers basic functionalities for tracking WIP, allowing users to:

  • Monitor billed amounts against estimates
  • View profit margins and run profitability reports

However, QuickBooks primarily serves as a starting point, lacking in-depth features specifically designed for reporting on and managing WIP effectively.

Knowify: Real-time WIP reporting for contractors

Knowify takes WIP management several steps further with features that give contractors detailed financial oversight of their projects. Here’s how Knowify enhances WIP management:

  • Automatic WIP calculation: Knowify automatically calculates the WIP number for each job, factoring it into the job’s profitability. This ensures businesses can account for work done but not yet invoiced, providing a more accurate financial picture. This is all done automatically in real-time, so there’s no need to manually build a spreadsheet report.
  • Flexible role in profitability calculations: Users can choose whether to include WIP in profitability calculations, offering flexibility in financial reporting. This option is particularly useful for understanding profitability for jobs where you’ve started working, but haven’t invoiced yet.
  • Exportable work in progress report: This report allows users to view detailed financial metrics, including WIP for a specific date range. This report is helpful when you’re working on multi-phase projects with longer timelines and want to see a financial snapshot for a specific timeframe within the overall project timeline. You can view this report in Knowify or export it to a spreadsheet to manipulate it further.

Actual costs versus committed costs

Knowify gives you the option to use either actual costs (expenses you’ve already paid) or committed costs (expenses you’ve obligated yourself to pay in the future) in your job costing calculations. Since cost versus budget is one of the inputs for WIP, choosing to use committed or actual costs is another way you can customize your account to show you the exact financial metrics you need to run your business.

See Knowify’s WIP reporting in action

Knowify vs. QuickBooks – A clear winner in WIP reporting and management

While QuickBooks provides a very basic foundation for WIP tracking, Knowify offers robust, feature-rich reporting designed to help business owners improve project profitability and project-level financial management. 

To see Knowify’s WIP and other financial reporting in action, plus powerful project management tools, sign up for a free demo today.