Construction overbilling

1. Front-loading. A subcontractor bills 60% of contract value on work that's physically 35% complete. The line-level arithmetic ties, but the percentage doesn't match reality. Front-loading helps the sub manage cash flow but can leave the GC or owner exposed if the sub defaults mid-project.

2. Cumulative overbilling. Three under-commitment invoices that individually look reasonable, but together exceed the total commitment. Vendor's contract is $11,500 with a $1,200 CO. They invoice $5,400, then $4,800, then $5,000. Each invoice individually looks fine. Together they total $15,200 — $2,500 over commitment. Without cumulative checks, this goes unnoticed.

3. Duplicate invoicing. The same work appears on two separate invoices, sometimes with slightly different wording. May be intentional, may be a clerical error from the sub's accounting system. Either way, money leaves twice for one job.

4. Quote-version mismatches. A sub sends a revised quote (say, $11,200 vs original $9,400) but the GC never formally approves the revision. The invoice arrives matching the revision. The PM checks the invoice against a quote — but doesn't notice it's matching the unapproved version.

Each form of overbilling looks normal at the invoice level:

• Front-loading: the math on the page ties — you'd need to walk the site to know the percentage is wrong.
• Cumulative overbilling: each invoice in isolation is under commitment — you'd need to run a SUMIF across all the sub's invoices.
• Duplicate invoicing: the duplicate often has slightly different wording — you'd need to cross-reference every invoice against every other invoice from that vendor.
• Quote-version mismatches: the invoice references "the quote on file" — you'd need to know which version of the quote was actually approved.

Doing all of this manually, on every invoice, from 15 vendors, across 3 active projects, is impossible for a single PM running a busy build. So most builders settle for catching the obvious mistakes and absorbing the rest as the cost of doing business.

Industry estimates from organizations like NAHB suggest residential builders lose 3–7% of project budget to preventable financial errors. The largest single category is overbilling in its various forms.

On a $1.4M custom home, 5% is $70,000 — a non-trivial portion of margin. Across a builder running 8–12 homes a year, that's $560K–$840K of margin walking out the door annually. Not all of it is recoverable, but most of it is detectable in real time if someone (or something) is checking every invoice against every prior document.

Ella runs four parallel verification checks on every invoice:

1. Line-item matching: compares every line on the invoice against the approved quote and any approved change orders. Mismatches in price, quantity, or description are flagged.

2. Cumulative spend tracking: maintains a running total per vendor per project. When a new invoice would push the cumulative total over commitment, it's flagged before approval.

3. Duplicate detection: compares each new invoice against every prior invoice from that vendor — by line item, total, date, and reference number. Likely duplicates are flagged with the prior invoice attached as evidence.

4. Quote-version reconciliation: tracks every quote version per vendor. When an invoice references an unapproved revision, it's flagged.

Every flag comes with the source documents attached. Your team has the evidence to push back or approve — and the verification work that used to take hours happens in seconds.