Work in Progress (WIP) Calculator NZ 2026/27

This calculator values the work you have already performed but have not yet been able to invoice, which is the least visible and most dangerous place for a contracting business to have its cash. You enter each live job with its contract value excluding GST, an honest assessment of how physically complete it is, the cost you have sunk into it in labour, materials and subcontractor claims, and the progress claims you have already issued. From that it works out the revenue you have earned on each job, compares it against what you have billed, and tells you whether you are under-claimed, meaning you have done work you have not charged for, or over-claimed, meaning you have billed ahead of the work and now owe the client delivery. It values the whole portfolio both at cost, which is what you are actually out of pocket, and at sell price, which is what is available to invoice. Then it converts the net unbilled figure into days of cash tied up, because a dollar amount rarely lands with an owner but a number of days does. WIP is the reason a profitable business can be short of money: the wages, the materials and the subcontractors have all been paid, and nothing has been billed. Figures are indicative management estimates for planning, not accounting records or a formal contract valuation.

The Gap Between Doing The Work And Being Paid For It

Every contracting business runs on a delay. You buy materials, pay wages weekly or fortnightly, and settle subcontractor claims monthly. Then, at some point after the work is done, you raise an invoice. Then you wait for payment terms. The money leaves first and arrives last, and the size of that gap determines whether the business needs an overdraft, and how big.

Most owners are aware of the second half of the gap, because unpaid invoices are visible: they sit in the accounting system as debtors and someone chases them. The first half is invisible. Work you have completed but never invoiced does not appear anywhere. It is not a debtor, because no invoice exists. It is not revenue in most small business reporting, for the same reason. It is simply money you have spent, on work you have delivered, that has produced nothing yet.

That is work in progress, and it is the single most common reason a busy, profitable New Zealand contracting business finds itself unable to pay its own bills.

Two Valuations, Both Worth Knowing

WIP can be valued two ways and the difference between them matters.

At cost is what you are out of pocket: the labour at wage cost, the materials delivered, the subcontractor claims received. In the worked example that is $121,320.00 across three jobs. This is the number that measures the hole in your bank account.

At sell price is what the work is worth to invoice: contract value multiplied by percentage complete, which comes to $200,600.00 of earned revenue. Less the $178,000.00 already claimed, that leaves $22,600.00 of net unbilled revenue. This is the number that measures what you could bill tomorrow if you got the paperwork out.

The gap between the two valuations is your margin on the work, which in this example is 39.52% earned to date. Both figures are real and they answer different questions: the cost figure tells you what the work has consumed, the sell price figure tells you what is available to recover.

Under-Claimed And Over-Claimed Are Not The Same Problem

The position on each job is earned revenue less what you have claimed, and the sign matters enormously.

In the example, Job A has earned $111,600.00 against $95,000.00 claimed, so it is under-claimed by $16,600.00. Job C has earned $51,000.00 against $38,000.00 claimed, under-claimed by $13,000.00. Together those two jobs are carrying $29,600.00 of work that has been done and never billed. That is not a commercial problem, it is an administrative one, and it is usually fixed by raising an invoice.

Job B is different. It has earned $38,000.00 and claimed $45,000.00, so it is over-claimed by $7,000.00. That looks helpful, and for cash flow today it is. But it is a liability, not an asset: you have taken money for work you have not yet done, and you still have to do it. A business that is systematically over-claimed across its portfolio has effectively borrowed from its clients, and the day the work has to be delivered without any further billing, the cash position deteriorates sharply. Over-claiming is a common feature of businesses that fail suddenly after appearing fine.

Netting the two together gives $22,600.00, which is the honest portfolio figure, but the net hides the fact that $29,600.00 needs invoicing and $7,000.00 of work needs delivering. Look at both.

Worked Example: Three Jobs And Nearly Two Months Of Delay

Take the defaults on this page. Three live jobs with a combined contract value of $335,000.00 excluding GST. Job A is 62% complete on a $180,000.00 contract, Job B is 40% complete on $95,000.00, and Job C is 85% complete on $60,000.00.

Earned revenue is $111,600.00, $38,000.00 and $51,000.00 respectively, totalling $200,600.00. Progress claims issued total $178,000.00. Net unbilled revenue is therefore $22,600.00.

Against $1,200,000.00 of annual revenue, average daily revenue is $3,287.67. The unbilled work is $22,600.00 divided by $3,287.67, which is 6.9 days of turnover sitting in jobs that have been done and not billed.

Then the delays compound. Add a 21 day invoicing lag and it is 27.9 days before that work becomes a receivable at all. Add 30 day payment terms and it is 57.9 days from doing the work to having the cash. Almost two months of funding, provided by you, on work that is already finished.

Percentage Complete Is Where This Goes Wrong

Every earned revenue figure on this page rests on a judgement about how complete each job is, so it is worth being careful about how that judgement is made.

The most common error is measuring completion by cost consumed. If a job has a $100,000 budget and you have spent $62,000, it is tempting to call it 62% complete. That is not a measure of progress, it is a measure of spend, and on a job running over budget the two diverge badly. A job that has consumed 70% of its budget while delivering 50% of the work is 50% complete and is also in trouble, and calling it 70% complete conceals exactly the problem you needed to see.

The second error is counting materials delivered to site as progress. A pallet of product sitting on site is an asset and a cost you have incurred, but it is not work performed. It belongs in your cost to date, not in your percentage complete.

Assess completion against the physical work, then compare it against the spend. When the spend percentage runs ahead of the completion percentage, that job is losing money and you have found it early, which is the whole point.

How To Shrink The Gap

Most WIP in small New Zealand businesses is administrative rather than structural, which is good news because administrative problems are cheap to fix.

Invoicing frequency is the biggest single lever. Moving from monthly to fortnightly claims roughly halves the average age of unbilled work, with no change to the contract, the client relationship or the work itself. Beyond that: agree a claim schedule up front so billing points are defined in the contract rather than negotiated each month; price and get written agreement on variations before doing the work, because unagreed variations are the most likely part of your WIP to become a dispute; ask for a deposit or mobilisation payment on larger jobs; and raise the invoice the day the claim period closes rather than whenever someone finds time.

It is also worth understanding that progress claims on construction contracts sit inside the payment regime of the Construction Contracts Act 2002, which sets out requirements for payment claims and payment schedules and the timeframes attached to them. Getting the form of a payment claim right matters, because a defective claim can cost you the payment timetable it was meant to trigger. This calculator is a cash management indicator rather than a payment claim, so take advice on the contractual form separately.

Related NZ Business and Cash Flow Calculators

• Days Sales Outstanding Calculator: the next stage of the cycle, being how long issued invoices take to get paid.
• Cash Conversion Cycle Calculator: the whole loop from paying suppliers to being paid by customers.
• Small Business Cashflow Forecast Calculator: project the cash position forward once you know what is trapped in WIP.
• Job Costing Calculator: check whether the jobs sitting in your WIP were priced to make money in the first place.
• Working Capital Calculator: the balance sheet view of the same funding problem.