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 Census Bureau’s Monthly Construction Spending report. But there are “silent costs” hidden in construction expenses that can be 1-to-5% of project invoices, say the auditing experts at CPRS.

Will the NFL’s Titans Make a $100MM Fumble?

For example, the $2.1 billion home of the Tennessee Titans football team started construction in January 2024. Already, the project is $135 million over budget. The New Nissan Stadium could potentially have $100 million in “silent costs” hidden in project invoices.

Read on to learn how our Billing Validation Process, industry-best Audit Team experience, and proprietary Pearl™ Software Suite can find and fix “silent costs” and, more importantly, create system improvements to avoid them in the future. Download the “Silent Costs” white paper for even more details on corralling CapEx and MRO expenses.

3 Reasons for Silent Costs 

Silent costs remain silent for many reasons, including:

1. Belief that ‘There are no errors in CapEx or MRO expenses.’ CPRS has found that silent costs exist with almost all expenses related to indirect labor, materials, and equipment. While systems and processes have improved, silent costs remain from 1-to-5% or more, according to audits conducted by CPRS.
2. Hubris. Arrogance and pridefulness remain in the business world. No one wants to expose that their work or their team’s work may have holes.
3. Lack of reward and recognition – Finding silent costs is not incentivized by most businesses, since it is a back-office activity. It’s an added cost to a business, and so often ignored. Growing the business gets the limelight. Finding silent costs is an investment project, yet it can have a 3x, 4x, even 5x ROI.

Benefits of Billing Validation

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,” said Dan Berg, Senior Vice President of CPRS. “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.”

Contract compliance errors lead to overcharges

Active Invoice Review also can solve problems before they happen. For example, one CPRS client unknowingly paid additional charges on $2.5 million in invoices from a subcontractor. The charges did not adhere to the original terms and conditions of one of their contracts and resulted in a $41,488 credit memo. Such instances, if left unchecked, could cast a shadow of doubt over even the most solid partnerships.

While CPRS is often brought into a project when the budget is blowing up, smart companies are engaging our experienced audit teams earlier. This forward thinking allows companies to stem the flow of billing errors during the beginning phases of a project and focus on corrective action to limit unintended profit loss moving forward.

“Our vision is to be the innovator in cost-recovery solutions,” Berg said. “Cost recovery solutions improve complex sourcing-to-payment processes and the financial health of any organization by recovering and preventing overpaid funds and identifying underpaid incentives, billing errors, fraud, or other factors. Our innovative approaches and best-trained audit teams deliver proprietary, cutting-edge solutions that address the ever-changing nature of B2B contracts and transactions.”

Download the “Silent Costs” white paper for even more details on corralling CapEx and MRO expenses.

Contact us to get tailored audit solutions for your business.

Are costs hiding in your contract labor expenses? Could unidentified labor errors be draining your bottom-line?

Spiraling labor costs are constantly in the news. If you’re seeking solutions to your rising contract labor costs, the answer might be as close as your invoices.

The $67,000 Solution
A CPRS client uncovered significant non-contractual overtime charges totaling $67,382.84, a whopping 18.5% of the invoices submitted and approved. Read on to learn how our Comprehensive Invoice Review process, industry-best Audit Team experience, and trademarked Pearl™ Software Suite turned costly labor mistakes into found revenue and reduced labor costs.

1. The CPRS Comprehensive Invoice Review Process

• When dealing with temporary labor, businesses often face complex contracting and stringent overtime rules. These complexities, while essential for protecting business-vendor relationships, can also lead to potential inaccuracies.
• Using our Comprehensive Invoice Review process, CPRS found hours invoiced that did not meet the criteria for overtime billing. Overtime was billed before the 40-hour work-week was reached.

2. An Audit-Team with Industry-Best Experience

• CPRS audit teams are recognized for their extensive industry experience and expertise.
• An audit guided by experience revealed an overbilling of $67,382.84 during the review period occurred.

3. The Power of Pearl™

•  The CPRS Pearl™ Platform provides a flexible, web-based suite of tools that can be tailored to meet your specific needs.
• Using the Pearl™ claims portal, reporting dashboard and audit tools, the client was able to manage and analyze data effectively and securely, leading to tens of thousands saved.

Download the Find Labor-Cost Savings Case Study for even more details on the $67,000 Solution. Contact us to get tailored audit solutions for your business.