Work-in-Progress Reports: what they are and how digital tools can simplify them
Work-in-Progress Reports. The WIP from the point of view of the Project Director. Some practical examples from the public and private construction industry and how they can be simplified using digital tools.
Work-in-Progress reports, or WIPs, are the accounting tool that outlines all the tasks and materials supplied throughout a project, from the moment works starts until the report is issued.
The Work in Progress report: a blessing and a curse for the Project Director
In this article, we want to look at construction site documents differently, from the point of view of the client and their on-site representative, the Project Director. This perspective differs from the one of a builder, who is usually interested in knowing how much his work costs versus how much they are being paid to do it.
The Project Director is the professional chosen by a public or private client and is tasked with supervising the day-to-day operations at a construction site. This includes ensuring everything done abides by the original design and current regulations, intervening when necessary to assign tasks, or providing additional instructions.
The Project Director must compile all the information related to the ongoing works. Obviously, this task accepts no mistakes, imprecisions, or delays: after all, the WIP is a legal document that certifies the project’s current status. This includes how much has already been done and which milestones need to be paid.
What do you need to know (and register) to make an accurate WIP?
But how much work have we done? This is a straightforward question at the beginning (zero) and the end (all) but what about in the middle? That point where the ledges are ready, but the windows aren’t, can be harder to define. At this point, you will need to start measuring...
To draft a WIP, the Project Director will have to follow these steps:
Measuring and classifying all the works already done
Quickly transferring this information to the accounting register to determine how much of the original project has been completed.
At times outlined by the contract, taking photographs of the accounting register and issuing a WIP
Overall, this means hitting pause to understand how much of the bill of quantities has been already completed.
...the WIP is a “problem” that all Project Directors must deal with!
Timeliness above all: how can we guarantee it?
The most crucial aspect in accounting is its timeliness: as long as everything is done according to the pre-established plan (the bill of quantities), everything will remain pretty simple. Problems start when you need to account for the modifications and the unexpected expenses they entail. Any actions that brought extra costs need to be registered by the Project Director as they happen.
How can a Project Director guarantee this? That’s easy: constantly monitoring everything that could happen and being always on site. But if a Project Director has five or more construction sites to control, how can he be in all of them simultaneously to produce an accurate WIP?
The answer is: through great effort and a relentless, overloaded schedule...
Or through the support of a digital tool like Mela that helps them stay on top of all the activities and expenses at the construction site.
An example of a Work in Progress Report: remodelling Ms Smith’s bathroom
Who compiles the report? As we have seen, the WIP falls within the purview of the Project Director. But what if we are dealing with a small project, such as Ms Smith’s bathroom remodelling?
In this case, the WIP is done after completing 100% of the work. In this case, the Project Director will list the job done and declare that everything was done according to best practices.
For projects involving only minor interventions (such as remodelling a room), the WIP is done when the works are completed.
Example of a Work in Progress Report: building a villa
How do you proceed for more complex projects, still within the private sector? The WIP will then record all the payments established by the original contract, usually divided in:
An advance payment at the signature of the contract
Two or more WIP reports, depending on the length of the project
One last payment upon completing the job
In private jobs, the amounts paid don’t correspond precisely to the works done at the moment of payment. Instead, they are often apre-determined percentage of the total amount established on the contract.
To draft the WIP, we will need the accounting register and the daily construction log.
The daily construction log and the accounting register are fundamental sources needed to compile an appropriate WIP.
Example of a Work in Progress report for public works
For public works, the WIP needs to be written, signed, and stamped by the Project Director. It should include:
The dates of any inspections carried out at the presence of a construction company’s representative to verify whether the works are effectively being carried out.
A list of all the parts built alongside their corresponding measurements, whether completed or only partially built
A cost summary for all completed works and for any modifications requested by the client
A declaration that all works performed followed best practices
A payment authorization from the company or a payment certificate instead of it
The WIP starts from the bill of quantities, which collects information ranging from the design stage to the activities needed to carry out the project on the field.
Work in Progress reports: how to simplify them using digital tools
Digital tools, especially those that are specifically designed for the construction industry like Mela, perform a vital task:
- On one side, they make it easier and quicker – while minimizing the risk of errors – to collect and draft the documents that trace the activities, works, materials, and equipment used on the construction site (including pictures, videos, messages, and remote documents).
- On the other side, Mela can control and manage a site’s accounts in real-time and with the utmost efficiency: data is sent immediately from the construction site to the accounting register, keeping the work in progress reports updated at all times.
And for the Project Director, the main character in this article?
- Since he is in charge of five or six construction sites (and can’t be ubiquitous), digital tools will allow him to monitor that any activities and requests are carried out under the appropriate standards.