When billings exceed earned revenue, a job is over-billed, which is recorded as a liability because the contractor has been paid ahead of the work. When earned revenue exceeds billings, the job is under-billed, which is recorded as an asset and represents work done but not yet invoiced.
Moderate over-billing can be healthy for cash flow, but large swings deserve scrutiny. Persistent under-billing can signal billing delays, unapproved change orders, or cost overruns. Lenders and sureties watch both closely in the WIP schedule.