Work in Progress (WIP) Calculator NZ 2026/27

Quick answer: Work in progress is work you have done but not yet invoiced, and it is funded entirely out of your own cash. On the worked example below, three live jobs have earned $200,600.00 of revenue against $178,000.00 of progress claims issued, leaving $22,600.00 of net unbilled revenue. Two jobs are under-claimed by $29,600.00 and one is over-claimed by $7,000.00. At $1,200,000 of annual revenue that unbilled work is 6.9 days of turnover, and with a 21 day invoicing lag it is 27.9 days before it even becomes a receivable. Enter your own jobs below.

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.

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Updated  Current rates and legislation applied.
One stage earlier than debtor days. Our Days Sales Outstanding Calculator measures how long invoices take to get paid once issued. This page measures the stage before that: work done that has never been invoiced at all. A business can have excellent debtor days and still be starved of cash, because a month of completed work is sitting unbilled and therefore never appears as a debtor.
Verification & Methodology
All figures are GST exclusive. GST charged on a progress claim is collected for Inland Revenue rather than earned, so including it would overstate both WIP and margin.
Earned revenue = contract value x percentage complete. This is the percentage of completion basis used in construction contract accounting, applied here in a simplified management form rather than as a formal financial reporting treatment.
Position = earned revenue less progress claims issued. Positive is under-claimed (unbilled revenue you are owed); negative is over-claimed (billed ahead of the work, a liability to deliver).
Days of cash tied up = net unbilled revenue divided by average daily revenue (annual revenue / 365), plus your stated invoicing lag. This is a management indicator, not a formal working capital ratio.
Percentage complete is your judgement. It should reflect physical work delivered, not cost consumed or time elapsed. Measuring it by spend is the most common way this calculation is distorted, and it hides an overrunning job rather than revealing it.
Not a contract valuation. Progress claims under NZS 3910 or a construction contract are subject to the payment provisions of the Construction Contracts Act 2002, including payment claim and payment schedule requirements. This tool is a cash management indicator, not a payment claim.
Last verified: July 2026.
Live jobs (excl GST)
Job
Contract $
% done
Cost to date $
Claimed $
Percentage complete is physical work delivered, not budget spent. Cost to date is labour at wage cost plus materials on site plus subcontractor claims received.
Cash context
$
Used to convert unbilled revenue into days of turnover.
days
Average days between doing the work and issuing the invoice.
days
Days from invoice to payment, to show the full cash cycle.
$22,600.00
of revenue earned but not yet invoiced

Position by job

Job Contract % done Earned Claimed Position

A red position is under-claimed, meaning work done you have not billed. A green position is over-claimed, meaning you have billed ahead of the work and still owe that delivery.

Portfolio totals

Total contract value$335,000.00
Revenue earned to date$200,600.00
Progress claims issued$178,000.00
Net unbilled revenue (WIP at sell price)$22,600.00
Under-claimed across jobs$29,600.00
Over-claimed across jobs$7,000.00
Cost incurred to date (WIP at cost)$121,320.00
Gross margin earned to date39.52%

Cash tied up

Average daily revenue$3,287.67
Unbilled revenue as days of turnover6.9 days
Plus invoicing lag21.0 days
Days before this work becomes a receivable27.9 days
Plus payment terms30.0 days
Total days from work done to cash in57.9 days

All figures exclude GST. Percentage complete is your own assessment and drives every earned revenue figure above.

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.

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Frequently asked questions

What is work in progress in a contracting business?

Work in progress, or WIP, is work you have physically performed but have not yet invoiced. It sits in the gap between doing the job and being allowed to bill for it, and it is funded entirely out of your own cash. You have already paid the wages, bought the materials and settled the subcontractor claims, but no invoice has been issued, so nothing is on its way back. WIP is one of the two main reasons a profitable contracting business can run out of money, the other being slow payment of invoices that have been issued.

How do you value work in progress?

There are two valuations and both are useful. At cost, WIP is the labour, materials and subcontractor cost you have sunk into unbilled work, which is the cash you are actually out of pocket. At sell price, WIP is the contract value multiplied by the percentage complete, less what you have already claimed, which is the revenue you have earned but not billed. The sell price figure is larger because it includes the margin, and it is the one that tells you what is available to invoice.

What does over-claimed and under-claimed mean?

Under-claimed means you have done more work than you have billed, so there is revenue sitting unclaimed. It is money you have earned and are entitled to, and it usually just needs an invoice raising. Over-claimed means you have billed ahead of the work, which is good for cash today but is a liability, because you still owe the client that work. An over-claimed position can make a business look healthier than it is: the cash in the bank belongs to work you have not done yet.

Why does work in progress cause cash flow problems?

Because the costs are paid long before the revenue arrives. Wages go out weekly or fortnightly, material suppliers want paying on the 20th of the following month, and subcontractors claim monthly. Meanwhile the invoice for that work might not be issued for three weeks and then sits on 30 day terms. On the default figures, $22,600 of unbilled revenue is 6.9 days of turnover, and adding a 21 day invoicing lag means roughly 27.9 days pass before that work even becomes a receivable, let alone gets paid.

How do I reduce the cash tied up in WIP?

Invoice more often and invoice faster. Moving from monthly to fortnightly claims halves the average age of unbilled work on its own. Beyond that, agree a claim schedule in the contract so billing points are defined rather than negotiated each month, price and agree variations before doing the work rather than after, ask for a deposit or mobilisation payment on larger jobs, and raise the invoice the day the claim period closes rather than when someone gets to it. Most WIP problems in small businesses are administrative rather than commercial.

Should WIP be valued including GST?

No. Work entirely in GST-exclusive figures. The GST on an invoice is collected for Inland Revenue rather than earned, so including it overstates both the value of your WIP and the margin you appear to be making. Note separately that GST becomes payable based on when you invoice, which is another reason unbilled work distorts the picture: revenue you have earned but not invoiced has not yet created a GST liability.

How does percentage complete get manipulated?

Usually not deliberately, but optimistically. The two common errors are measuring by cost consumed rather than work delivered, which flatters a job that is running over budget, and treating materials delivered to site as progress, which they are not until they are installed. If you assess a job at 62% complete because you have spent 62% of the budget, you are not measuring progress at all, you are measuring spend. Assess against the physical work, then compare that with the spend, because the gap between the two is your early warning that a job is going wrong.

What is the difference between WIP and accounts receivable?

Receivables are invoices you have issued and are waiting to be paid. WIP is work you have done and have not yet invoiced, so it sits one stage earlier in the cycle. Both consume cash, but only receivables show up as a debtor in most small business accounting systems, which is exactly why WIP gets overlooked. A business can have clean debtor days and still be starved of cash because a month of completed work has never been billed.