Over-Billing vs. Under-Billing: The Two Most Important Numbers on Every Construction WIP

Over-billings and under-billings are the balance-sheet items that most distinctively belong to construction accounting. They reveal whether a contractor is pulling cash forward or financing the customer, and they are the numbers that sureties and lenders scrutinize before extending credit. Here is what each actually means, how to interpret the balance, and when 'over-billed' is healthy vs. a warning sign.