Progress billing is supposed to track the work. It rarely does exactly. A front-loaded draw schedule bills ahead of the work: that's overbilling, and the cash in the bank belongs to the rest of the job. A slow invoicing habit bills behind it: that's underbilling, and the contractor is lending the client money interest-free. Accountants call them billings in excess of costs and costs in excess of billings; the WIP report finds both.
A worked number
A $60,000 job, 40% complete by cost, has earned $24,000. Billed $30,000: overbilled $6,000. Spend that $6,000 on another job's payroll and this job finishes short. Billed $18,000: underbilled $6,000, which is money the contractor has earned and is waiting on for no reason.
The mistake it hides
Reading an overbilled bank balance as profit. Small contractors with three jobs running can be overbilled on all three and feel flush, then hit the month all three reach the finish line and the cash is gone. The reverse habit, underbilling out of politeness, is quieter and just as expensive.
In Obra
Obra doesn't compute earned revenue or track what's been invoiced; it shows cash collected against the adjusted contract and recorded cost against the expected final cost. To find the billed-versus-earned gap, take billed to date from your invoicing, multiply the adjusted contract by recorded cost over expected final cost to get earned, and compare the two; Obra supplies the three inputs on that side, kept current from the crew's receipts. The retainage and progress billing calculator tests a draw schedule against a cost curve before you sign it.