Bellevue, WA (January 2025) – The U.S. construction industry is experiencing an unprecedented boom, with construction spending up 6.5 percent in the first 11 months of 2024, according to the U.S. Census Bureau’s Monthly Construction Spending report. This surge coincides with stubbornly high costs for labor, equipment, and materials.
But there are “silent costs” hidden in construction expenses that can be 2-to-5 percent of project invoices, say the auditing experts at CPRS.
“For example, the new $2.1 billion home of the Tennessee Titans football team could have as much as $100 million in silent costs hidden in project invoices,” said Dan Berg, Senior Vice President of CPRS, a Cost Recovery Audit firm delivering innovative solutions to payment-accuracy problems for the world’s largest corporations. CPRS helps its clients recover millions of dollars in invoice payment errors using proprietary, AI-powered technologies and industry-best Recovery Audit experience.
With more than $700 billion worth of construction megaprojects (projects valued at more than $1 billion) announced in North America in the last 5 years, huge project expenses are being tallied nationwide. More recently, the federal government’s CHIPS and Science Act is investing nearly $53 billion to bolster U.S. semiconductor capacity. All this spending creates massive construction projects, and massive opportunities for errors and mismanagement.
“At a time when accounting, project management, and other tracking software are at their finest, silent costs in CapEx and MRO expenses still linger. They’re tough to find when you have invoices with hundreds or even thousands of line items,” Berg said. “The silent cost is the sum of billing errors that go unnoticed, occurring outside of the compliance systems most companies utilize. Errors and overcharges can have a significant impact to the bottom line.”
A third-party billing validation process is the best approach to finding and fixing “silent costs,” Berg continued. “The best billing validation processes not only identify and reconcile silent costs, but also create system improvements to prevent them in the future. These processes include root cause analysis and other analytics to define the source of error, and where applicable, deliver recommendations via defined feedback loops meant to fix those root causes at the source.”
CPRS’ Contract Billing Validation Services follow a rigorous process to compare vendor invoices or project cost summaries to the contractual terms governing the payment of invoices. CPRS provides a comprehensive suite of services, including Active Invoice Review, Cost Summary Review, and Recovery Audits.
“Many clients are using our new Active Invoice Review process to find invoice errors before paying that invoice,” Berg added. “With CPRS Active Invoice Review, we can validate for accuracy before your internal approvers see the final invoice, saving you time and money by eliminating the costs of rework and outright errors.”
CPRS has 30 years’ experience helping companies with billing validation and systems improvement, using a mix of proprietary technology and the best-trained audit team in the industry.
For more information on CPRS Contract Billing Validation Services, visit the CPRS blog or click here to download the “Silent Costs” white paper.
