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SURETY FINANCIAL STATEMENTS & WORK IN PROGRESS STANDARDS

These are the details of an industry solution for item 2 (Surety Financials & WIPs) described in SuretyScience's Surety Blueprint™.  One of the most critical components of surety underwriting is the analysis of a contractor’s financial statements and work performance. Yet despite years of discussion and an ongoing industry initiative, the Surety market still lacks a reliable, streamlined method for collecting Financial Statements and Work in Progress (WIP) reports. Most Sureties, brokers, and agencies continue to rely on methods that are labor‑intensive, costly, and inconsistent. These inefficiencies lead directly to:
  • Greater Risk - Underwriters are deprived of timely, meaningful, and reliable data, undermining the accuracy of credit and capacity decisions.
  • Revenue Leakage - Stale WIP reports result in missed opportunities to capture additional earned premiums.
  • Increased Liability - Inability to close out bonds due to outdated or incomplete WIP status leads to unnecessary exposure on open obligations.

Ongoing Efforts

Methodologies

Several different methods are currently used across the Surety industry to manage and analyze Financial Statements and Work‑in‑Progress (WIP) reports.

1) Manual Entry

Although this approach represents the path of least resistance for Principals and Agencies, it places a significant burden on insurers. Many carriers rely on offshore CSR teams for manual data entry, while others go so far as to have highly compensated underwriters perform the arduous task themselves in order to “stay close to the numbers.”

Challenges

These documents are typically received via unsecured email, most often as PDF files in a wide range of formats that must be manually interpreted.  The volume of data required is substantial, increasing the likelihood of errors during manual entry.

2) Spreadsheet Import

Sureties provide Agencies and/or Principals (most often construction contractors) with a pre‑formatted spreadsheet template that standardizes their preferred structure of financial statements and work‑in‑process reports for seamless and efficient ingestion into the Surety’s systems.

Challenges

Neither agencies nor principals want to invest time reformatting their reports to meet the Surety’s requirements. And if the template isn’t fully locked down, it will almost always be altered to fit individual preferences.

3) Document Intake Solutions

Vendors have sold Optical Character Recognition (OCR) technologies for automating the capture of financial statements and work in process reports (WIPs).  More recently, many have begun offering solutions augmented with advanced AI capabilities.

Challenges

These solutions are costly. Traditional OCR requires extensive data reconciliation due to its high error rate. Although AI promises improved accuracy, it has not yet matured and achieved broad adoption.  Compounding the challenge, data locked inside document systems is difficult to merge into Surety underwriting platforms, making it hard to extract actionable insights.

4) XBRL Standard

(SuretyScience Endorsed)


XBRL is an open standard for digital business reporting. It is widely utilized by companies when transmitting financials information. A taxonomy was published in 2021 supporting both Surety financial statements and work in process reports (WIPs).

Challenges

Adoption continues to be limited. Many accounting systems and most construction management systems do not yet support the transformation of financials and WIPs into XBRL format, nor do they provide mechanisms to store or transmit XBRL‑based files.  Greater industry advocacy is needed. The Surety sector must more actively lobby and petition vendors to adopt and implement this functionality.

Related Standards

There are several ongoing efforts in support of the Surety XBRL standard.
Uniquely identifying companies and understanding how they are interrelated can be challenging.  XBRL supports the use of the Legal Entity Identifier (LEI), a 20‑character code based on the ISO 17442 standard developed by the International Organization for Standardization (ISO).  These identifiers can be embedded directly into key XBRL documents, including annual reports and financial statements, in both human‑readable and machine‑readable forms to serve as a consistent, standardized organization identifier.

Method

Numbers 1-4 always show the ID of the LOU which issued the LEI

Entity Identifier

Numbers or letters 5-18 are unique to each entity

Verification

Numbers 19-20 are for verification purposes

LEI Example

1234

567890ABCDEF1G

23

Today, uniquely identifying projects on Work‑in‑Process (WIP) reports is still a highly manual and error‑prone process. Capturing the full set of required data accurately and on time is challenging. Transforming that information into meaningful metrics and insights remains unnecessarily burdensome. XBRL standard offers a taxonomy for WIPs (summary list of project statuses with several key attributes like estimated completion date and cost to complete).  But that only provide a small subset of full breath of project information that Sureties require to proactively identify risk.

A Digital Twin—a digital representation of a real‑world object—serves as an exact digital replica of a construction project.
Digital twins are quickly becoming a cornerstone of modern construction, providing an accurate, real‑time view of project information.
  • Universal Project Identification Number (UPIN) - By leveraging Digital Twins, projects are uniquely identified and a seamless information pipeline is created between Principals (typically Construction companies) and Sureties.
  • Today, project data is typically reported every 90 days.  Automated, real‑time project data delivery enables Sureties to predict issues earlier, control costs against budgets more effectively, and monitor risks with far greater precision.
  • Widespread adoption of digital twins would eliminate the need for traditional Work‑in‑Process reports altogether—replacing periodic snapshots with continuous, accurate, real‑time project data.

The XBRL Standard

SuretyScience supports the XBRL Standard as the optimal industry solution for transmitting Surety Financial Statements & Work in Progress Reports (WIPs) 

The Process

Source
Transformation

The sender converts financial statements and WIP report data into XBRL format.

Export

The sender saves locally or submits directly by consuming the target system’s endpoint web services.

Transmit

The sender delivers data to the receiver through secure, authorized transmission channels.

Target
​Transformation

The receiver converts  data from the XBRL format into an  structures for internal processing.

XBRL Standard Benefits

Mature, Proven Technology

Already extensively utilized by the U.S. Securities and Exchange Commission (SEC) for the filing of financial statements by publicly traded companies.

Greater Underwriting Speed & Accuracy

Receiving timely financial and work‑progress data accelerates decision‑making and improves confidence.

Reusable Across The Industry

The standard can be uniformly adopted by every participant in the financial data reporting ecosystem, including insurers, agencies, and principals.

Reduces Overhead Costs & Mistakes

Eliminates labor‑intensive manual entry and reduces the errors that inevitably arise from repeatedly rekeying data.

SuretyScience brings together the domain expertise, technical capability, and uniform data foundation needed to help successfully implement this solution.

Schedule Call

​​SURETY FINANCIALS & WIPS ONLINE PETITION

Let the construction, accounting and surety software vendors know just how important adding functionality that enables XBRL this is to you!

Sign The Petition
Sage®
Procore®
Access Coins®
Plexxis®
Premier Construction Software®
Foundation Software®

Insurers & Software Vendors

Surety Systems

Sage®

Vendor: Construction Management & Accounting Systems

Procore®

Vendor: Construction Management & Accounting Systems

Access Coins®

Vendor: Construction Management & Accounting Systems

Plexxis Software®

Vendor: Construction Management & Accounting Systems

Premier Construction Software®

Vendor: Construction Management & Accounting Systems

Foundation Software®

Vendor: Construction Management & Accounting Systems

Insurers & Software Vendors

Surety Systems

​Initiative 2: 
​Surety Financials & WIPs​

 Financials Statements and Work in Process Information

Current State

​​In most cases, financial statements and work in process reports are exchanged via email and then arduously rekeyed into other systems.  Although a widely utilized, standard schema exists named extensible Business Reporting Language (XBRL) to transmit this data, it has not been adopted by the Surety industry.  

Future State

A streamlined XBRL taxonomy properly mapped for Surety. Enhanced functionality within construction accounting systems enabling Financial Statements and Work in Process (WIP) reports to be easily transformed and instantly transmitted.  Reliance on manual entry, OCR and AI to interpret unstructured formats like email, PDFs, and spreadsheets is eliminated.

Progress

SuretyScience fully endorses the industry’s ongoing work to establish XBRL as the standardized format for securely and efficiently transmitting Surety Financial Statements and Work‑in‑Process (WIP) Reports from principals to agencies and insurers, ensuring interoperability and data integrity across all systems.

Key Participants

XBRL®

Taxonomy

SuretyScience®

Advocacy, Assistance,

Data Governance & Uniformity

Sage®

Vendor: Construction Management & Accounting Systems

ProCore®

Vendor: Construction Management & Accounting Systems

Access Coins®

Vendor: Construction Management & Accounting Systems

Insurers & Software Vendors

Surety Systems

Key Participants

XBRL®

Taxonomy

SuretyScience

Advocacy, Assistance,
Data Governance & Uniformity

Sage®

Vendor: Construction Management & Accounting Systems

Procore®

Vendor: Construction Management & Accounting Systems

Access Coins®

Vendor: Construction Management & Accounting Systems

Insurers & Software Vendors

Surety Systems

Table of Contents

Other SuretyScience Initiatives & Products

Initiative: 
The Surety Blueprint™

Initiative: 
Surety Bond Verification Standards

Initiative: 
Surety WIPS & Financials Standards

Initiative: 
Surety Account Application Standards

Product: 
Uniform Surety Data

Product: 
Surety Risk Information