Work in progress, also know as WIP, is an asset on the company balance sheet. WIP is the accumulated costs of unfinished goods that are currently in the manufacturing process.Companies that manufacture large or custom-made items typically use a work in progress inventory system. Such a system is often called a job costing system. As each project moves through production, the cost of raw materials and labor are accumulated in each specific job’s account ledger. For any given financial reporting period, the total amount of unfinished jobs is the amount reported as work in progress in the asset section of the balance sheet. WIP is also used in the construction industry for calculating the proper time to bill when the construction contract calls for percentage completion billing. Hilda has a contract to build an office tower for Conglomo Inc. for $120,000,000. The contract is to be billed on the percentage completion method in 25% increments. Hilda estimates her total cost to build the office tower will be $100,000,000. Hilda records all the materials and labor costs in her accounting system in the WIP account. When the WIP account reaches $25,000,000 Hilda sends Conglomo an invoice for $30,000,000, which is 25% of the contract price.