Overbilling / underbilling
Overbilling is billing more than the work completed to date; underbilling is billing less. Both distort how profitable a job looks until it's reconciled.
Overbilling can make cash and profit look better than they are (you've collected ahead of the cost), while underbilling hides earned revenue. A WIP report catches both. Neither is inherently bad, but mistaking billing timing for profit is a classic trap.
Related terms
- Work in progress (WIP) — A WIP report shows, across all open jobs, how much has been earned vs. billed — surfacing overbilling and underbilling and your real position.
- Progress billing — Progress billing is invoicing for a job in installments as work is completed, rather than one lump sum at the end.