The purpose of the WIP report is to monitor and manage billing and cash flow as well as warn you when a job is heading over budget. To prevent project managers from being caught off guard by cost overruns, the WIP must be accurate and up to date with real-time data.
As such, using Excel to generate a WIP report is a self-defeating endeavor.
Spreadsheet Accuracy Problems
A Market Watch report entitled 88% of spreadsheets have errors indicates that the error rate for spreadsheets can be as high as 1% or more of formula cells. That means that all data, no matter how carefully entered into cells, could go into a cell with a formula error and therefore be corrupt. In a large spreadsheet, dozens of errors can go undetected.
The problem is so widespread that specialized groups have formed around the globe to deal with the “pandemic bad math” caused by spreadsheets. Patrick O’Bierne, chairman of the European Spreadsheet Risks Interest Group, states in the Market Watch article that the best remedy is peer review – that is, another pair of expert eyes reviewing a spreadsheet – but while this improves accuracy, it takes so long that the spreadsheet is out of date before the project manager even sees it.
In addition to inaccurate formulas, spreadsheets are also subject to keystroke errors and are easily overwritten with just a click of the ‘save’ button. The GIGO (garbage in, garbage out) principle applies if a WIP report is generated from a corrupted spreadsheet and is disastrous when it leads to underbilling or running short of billable money before your costs to complete end.
Accurate WIP Reports with Cabbage
Our founder, Joe Parton, developed Cabbage to overcome the struggle construction clients experienced with obtaining accurate and timely WIP reports. Managing cash flow requires a precise WIP report that keeps you up to speed on the current state of a project as well as its cost to complete.
Cabbage provides the WIP solution that makes it easy to track and adjust to cost changes, change orders, and subcontractor changes. Read more about how Cabbage and Sage 300 construction management software combine for accurate WIP reports that improve the financial health and increase the profitability of your company.
You can also contact us for more information.