Restoration Bookkeeping and WIP Tracking: Why You Might Be Profitable and Still Go Broke
If you run a restoration business, chances are you’ve experienced this frustration:
“We’re busy. Our jobs are profitable. But somehow, we’re always tight on cash.”
Sound familiar?
This disconnect between profitability on paper and actual cash in the bank often comes down to one critical issue: incomplete or inaccurate Work-in-Progress (WIP) tracking—and the way it's handled in your bookkeeping.
What Is WIP in the Restoration Industry?
In restoration, Work-in-Progress represents jobs that are active but not yet fully billed or completed. You're spending money—on labor, equipment, subcontractors—but haven’t yet invoiced or collected payment for that work.
That means:
Costs are already hitting your books
Revenue isn’t (yet)
Cash flow gets squeezed
Your P&L might mislead you
Without tracking WIP properly, your financial statements give you a skewed view. You might think you had a slow month when in fact, you're in the middle of your busiest season—it just hasn’t hit your revenue line yet.
Why Your Bookkeeper Needs to Know More Than QuickBooks
Most bookkeepers can reconcile accounts and keep your books tax-ready. But in restoration, you need more than clean books—you need visibility.
Here’s what restoration bookkeeping should include:
Accurate COGS by job and service type (mitigation vs. rebuild, etc.)
Timely classification of expenses (especially subcontractor and labor)
WIP tracking entries to match revenue and costs by period
Clear reporting on earned vs. unearned revenue
Proper allocation of overhead to in-progress jobs (if you want to see true job profitability)
If your books only reflect cash in/cash out, you’ll always be behind. And if they show completed jobs but not the value of ongoing work, you’re flying blind.
What Happens Without WIP Entries?
Let’s say you spend $75,000 in labor and materials in June, but don’t bill or collect until July or August.
Without WIP tracking:
June shows a big loss (all costs, no revenue)
July shows a big profit (all revenue, no matching costs)
Your financials are lumpy, misleading, and impossible to act on
Forecasting becomes guesswork
With WIP tracking:
You accrue earned revenue on open jobs each month
Costs and revenue match the work completed
You get consistent margins and better visibility into your operations
How Restoration Companies Can Track WIP
Here’s what solid WIP tracking might look like:
Monthly job status updates (percent complete, billable progress)
Journal entries to adjust:
Debit: WIP – Unbilled Revenue
Credit: Earned Revenue
Adjustments reversed and re-booked each month to reflect updated progress
Weekly collaboration between the ops team and finance team
WIP tracking doesn’t mean you’re doing anything “creative” with your books. It means your books reflect reality—the work you've done, even if the check hasn't come in yet.
Your Financials Should Help You Make Decisions
If your current financials just tell you what happened last month, you're missing out.
At Kiwi Cash Flow, we specialize in financial reporting and forecasting designed specifically for restoration contractors. We incorporate WIP tracking, project-level insights, and actionable KPIs that help you actually use your numbers—not just file them away at tax time.
Want to see what clean books and accurate WIP tracking could do for your business?
📅 Schedule a free consultation with us.