The 2% Problem: How Construction Companies Lose Revenue They've Already Earned

Every construction company talks about winning work. Fewer talk about keeping what they've already won.

There is a quiet, persistent problem in construction finance that doesn't show up on a standard dashboard and rarely makes it into a board meeting until it’s too late. We call it the 2% Problem: the average percentage contractors lose on their change orders due to system disconnects, process gaps, and manual errors.

For a $50 million contractor, that isn't a rounding error—it's $1 million per year. This isn't money lost to bad bids or estimating errors. It is revenue that was approved, contracted, and delivered, but never collected.

In an industry where margins are notoriously thin, that 2% represents a massive portion of net profit. This post explores where that revenue goes, why traditional accounting methods fail to catch it, and how Aegis Veritas closes the loop.

Where Does the Money Go?

Revenue leakage in construction rarely happens in a single, dramatic event. You won't typically find a missing million-dollar invoice. Instead, the revenue leaks out slowly, in small amounts, across dozens of active projects. It is a death by a thousand cuts, usually stemming from three specific disconnects between operations and finance.

1. Approved Change Orders That Never Get Invoiced

The most common source of leakage occurs during the handoff between project management and billing. A change order (CO) is approved in Procore. The project team celebrates the win and executes the work. However, the notification of that approval doesn't automatically trigger an invoice in the billing system, nor does it update the opportunity value in Salesforce.

Someone—usually a Project Manager or Project Accountant—has to manually bridge that gap.

When a team is running 30, 50, or 100 active projects, COs slip through the cracks. It doesn't happen every time, just often enough to matter. Internal research and observation suggest that mid-sized contractors often have 3 to 5 unbilled change orders floating in the systems every month. These are often discovered months later, or worse, after the project has closed out.

2. Revenue Recognized in One System but Not Another

Construction finance relies on a "source of truth," but most contractors are operating with three different versions of reality:

• Project Management (e.g., Procore): Says the work is completed and the CO is approved.

• CRM (e.g., Salesforce): Shows the opportunity still sitting at the original contract value.

• ERP/Accounting: Has a completely different number based on what has actually been billed.

These mismatches don't necessarily cause immediate operational problems. The concrete still gets poured; the steel still gets erected. But they cause chaos at month-end. Finance teams often spend 40+ hours trying to reconcile these three systems. Often, the reconciliation process reveals that revenue was recognized operationally but never billed—or billed but never collected.

3. Scope Changes That Update Projects but Not Pipelines

When a project scope changes in the field, the project team adjusts its plans immediately. But does that scope change flow back to Salesforce? Does the opportunity value update? Does the revenue forecast adjust?

In most construction companies, the answer is no—at least, not automatically. This means the sales pipeline is showing one set of numbers while operations is delivering another. Leadership is forced to make strategic decisions based on data that is effectively obsolete the moment a scope change happens on the jobsite.

Why This Matters More Than You Think

The 2% loss isn't just a financial problem. It is a visibility problem.

If you cannot trust your data, you cannot forecast accurately. When systems aren't connected in real-time, leadership struggles to answer basic questions without a manual fire drill:

• How much revenue did we actually recognize this week?

• Which change orders have been approved but not yet invoiced?

• What is the true value of our active pipeline, inclusive of all approved COs?

• Are we on track for the quarter, or are we falling behind?

If answering any of these questions requires opening multiple applications, exporting CSVs, and building a pivot table, you have a visibility problem. And visibility problems always have a cost—even if you can't see it on the balance sheet yet.

The Manual Reconciliation Tax

Beyond the direct revenue leakage, there is the massive overhead cost of trying to prevent it manually. This is the "Reconciliation Tax."

Our internal data indicates that the average mid-market contractor spends roughly 47 hours per month on revenue reconciliation. That is comparing Procore data to Salesforce data to accounting data, line by line, trying to find and fix discrepancies.

That is more than a full week of work for a skilled controller or finance director—every single month. Instead of analyzing high-level strategy or optimizing cash flow, your most valuable financial minds are stuck doing data entry and forensic accounting just to answer the one critical question: "Do our numbers match?"

For most companies, the answer is usually: "Not quite." And the gap between "not quite" and "exactly right" is where the 2% lives.

What the Best Companies Do Differently

The construction companies that don't lose this money share one characteristic: their systems are connected in real-time. They have moved from Legacy Revenue Ops to Revenue Intelligence.

In this model:

• Data Flows Automatically: When a change order is approved in Procore, the opportunity value in Salesforce updates instantly.

• Alerts are Proactive: When revenue is at risk (e.g., a CO is approved but aged without an invoice), an alert fires immediately—not 30 days later at month-end.

• Reconciliation is Continuous: When it's time to close the books, the reconciliation is already done because the data has been in sync all along.

This isn't theoretical. It is the approach that modern construction finance teams are adopting to protect their margins. By unifying revenue data across Salesforce, ERP, and operations, they gain a "Real-Revenue Loop" that reveals exactly what was sold, delivered, and collected.

What You Can Do Today

If you suspect your company has a 2% problem (and statistically, you probably do), you don't have to overhaul your entire tech stack overnight to find it. Start with these three steps:

1. Audit your last 90 days of change orders. Pick 20 Change Orders at random and trace them manually from Procore approval to Salesforce opportunity to ERP invoice. How many made the full journey without a manual intervention or a data gap?

2. Time your month-end close. Track exactly how many hours your finance team spends reconciling systems. If it's more than 10 hours, you have a process problem that technology needs to solve.

3. Quantify the gap. Take your annual change order volume, multiply it by 2%, and ask yourself: "Is this number worth investigating, to save?" For most companies, the answer is a resounding yes.

The 2% problem isn't glamorous. It doesn't make headlines like a new skyscraper project. But for the companies willing to look at it honestly, fixing it is one of the highest-ROI investments they can make.

Aegis Veritas provides real-time revenue intelligence for construction companies and solves the problem by automatically syncing Procore and Salesforce. If you'd like to see what the 2% problem looks like in your data, we'd love to show you.