Percent complete measures how far along a job is. The cost-to-cost method, the most widely used for contract revenue, divides cost to date by estimated total cost (cost to date plus estimated cost to complete). It’s an input method under ASC 606, which lets most contractors recognize revenue over time as work progresses.
Why it matters
Percent complete drives earned revenue, which drives over and under billing, which drives reported profit. If the estimated total cost is wrong, every number downstream is wrong too. It’s also different from physical percent complete or billed percent complete, and mixing them up is a common source of bad WIP schedules.
Worked example
Illustrative: Riverside Medical Center has a $49.3M contract and a projected margin of 11.4%, so estimated total cost is $49.3M times 0.886, or $43.68M. Cost to date is $31.7M.
Percent complete = $31.7M / $43.68M = 72.6%.
The schedule might show the job as 66% physically complete. That difference is worth a conversation: it can mean costs are front-loaded (material bought early), or that the cost estimate is too low.
Common mistakes
- Using billed percent from the pay app instead of cost-to-cost.
- Including uninstalled stored materials in cost to date, which can overstate progress. Many contractors exclude them from the calculation.
- Updating cost to date monthly but the cost estimate only quarterly.
How os.construction handles it
We’re building percent complete to calculate from live cost and the latest forecast on the same record, with physical progress from the field shown next to it so gaps are obvious.