- December 15, 2016
- Posted by: Surety Bond Experts
- Category: Surety Bonds, Work in Process Schedule
The importance of a Work in Process Schedule
A Work in Process schedule (WIP) is a great tool for contractors and surety companies. It helps to document the progress and projected success of a project. Basically, a WIP is a game plan that is followed through and checked upon, to determine how the project is progressing and when it will be completed. A well-documented WIP can help the contracting company earn approval for future surety bonds.
In the construction industry, several things are documented in a WIP. They are, but are not inclusive or limited to, the contract price, billings to date, costs incurred to date, estimated completion cost and estimated gross profit. By providing a WIP, the contractor shows competency to the surety bond producer in their ability to complete the job.
In addition, a WIP is important to a surety bond producer because it is a way to be assured that the project is progressing as planned. Specifically, it helps to monitor profitability, any errors and profit fade and gains that may happen. For the contractor, a WIP helps to show the financial strength of the company and the competency to complete the project.
A WIP is a great communication tool for a contractor and surety bond producer. It helps the contractor show competency and ability to complete a project and it reassures the surety bond producer of the contractor’s abilities. For future benefits, a WIP that is on or ahead of schedule can help in future surety bond applications.
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