How to fix project closeout bottlenecks: Compliance, invoicing, and contractor oversight
What slows closeout isn’t the paperwork, it’s the process
Project closeout should signal a clean handoff, a sense of accomplishment, and a final signoff. But for many project and plant managers, it feels more like a backlog of manual tasks, invoice disputes, and documentation chases. This is a common reality in both capital and construction project closeout, where issues often pile up at the worst possible time.
Closeout is often long, painful, and deeply manual. Even after physical work is complete, teams can find themselves stuck in a cycle of verifying hours, reconciling change orders, and confirming compliance with little centralized oversight. This isn’t just an inconvenience. It drains time, adds cost, and pulls key decision-makers back into day-to-day admin work.
If that experience sounds familiar, you’re not alone. In the construction sector, payment delays and documentation errors contribute to nearly $280 billion in annual inefficiencies across North America. These aren’t just paperwork problems. They’re symptoms of a system that doesn’t surface issues until the end.
The good news is that there’s a better way to manage project closeout. But to fix it, you have to stop thinking of closeout as a single phase. You have to design for it from day one. That means embedding closeout best practices into your workflows long before the final invoice is due.
Why project closeout breaks down
Project closeout rarely falls apart because of one issue. Delays tend to stack up from small breakdowns in communication, documentation, and accountability that happen earlier in the project. This section looks at the three most common contributors to closeout bottlenecks and why they’re so difficult to resolve at the end.
Closeout problems build up over time
By the time a capital or maintenance project reaches its close, many of the key decisions have already been made. The work has been executed. Contractors have tracked time and submitted reports. Materials have been ordered. Change orders have been introduced. Approvals may have been given verbally, over text, or not at all.
When it’s time to reconcile the paper trail, people often realize that the systems in place weren’t designed to maintain a clear view of scope, progress, and cost across all contributors.
The office expects complete invoices with matching backup. The field may have approved hours without knowing the downstream accounting needs. Contractors may have operated in good faith without full visibility into the rules for documentation or coding. The project manager, caught in the middle, becomes the person responsible for translating all of it back into a version that meets internal standards.
This is how friction builds up. By the time closeout arrives, that friction turns into full-blown bottlenecks that stall the entire project closeout process.
Compliance can’t be an afterthought
Contract compliance is often framed as a legal or procurement concern, but it plays a critical role in operational execution. When compliance workflows are disconnected from daily work, small errors get embedded into the project. They’re not always caught in real time, and they don’t always show up until final invoicing.
That creates problems, especially in environments where compliance expectations are high. For any team looking to streamline project closeout, catching compliance issues early is non-negotiable.
Missing documentation, incorrect cost coding, and skipped safety or onboarding steps are common friction points. In some cases, contractors aren’t aware of which steps require formal signoff. In others, documentation exists but isn’t accessible to the right people at the right time. These gaps aren’t always deliberate, but they lead to a reactive scramble to recreate an audit trail that should have been visible from the start.
Rebuilding that trail at the closeout stage takes time. For teams managing dozens of concurrent projects, the cumulative cost is significant. According to the Project Management Institute, poor project performance, often tied to weak execution and delayed closeout, results in a waste of nearly 11.4 percent of total project investment.
Invoicing shouldn’t consume your leadership’s time
Manual invoicing processes are one of the most cited pain points in project closeout. For many companies, reconciling a single invoice can take hours of manual work. The responsibility often lands on the desk of someone with more strategic tasks on their plate.
In many organizations, invoice approvers spend close to an hour manually keying in dozens of accounting lines per invoice. The process often involves cross-referencing cost areas and subprojects in separate systems to ensure accuracy. For leaders managing large budgets and capital programs, that time adds up quickly and pulls focus away from more strategic work.
That experience is not unusual. We’ve heard similar versions from countless invoice approvers and capital project sponsors. The burden comes from the fact that even when invoices are submitted correctly, the backup isn’t always there. If a timesheet lacks a field-level signature or doesn’t match internal cost codes, the invoice grinds to a halt.
In many cases, that missing information leads to payment delays, internal escalations, and tension between contractors and finance. These issues aren’t rare. Only 49 percent of construction companies report getting paid within 30 days. That lag contributes directly to contractor frustration and internal strain.
Contractor relationships are about clarity, not control
There’s often a misconception that contractor management means keeping vendors on a tight leash. That’s not how most project teams operate, and it’s not how strong partnerships are built.
In reality, the relationship between internal teams and contractors depends on clear expectations, well-defined workflows, and mutual accountability. Most contractors want to deliver good work, avoid surprises, and get paid on time. When projects go off track, it’s usually due to a breakdown in shared information, not intent.
Change orders get discussed but never documented. Timesheets get approved in the field but aren’t reflected in central systems. One project manager might track scope in a spreadsheet that isn’t shared, while another assumes it’s being captured elsewhere.
When there’s no consistent source of truth, small discrepancies multiply. Project closeout becomes the moment when everyone tries to reconstruct what already happened. That process frustrates everyone, including contractors.
A more aligned approach helps everyone operate with confidence.
How to improve project closeout proactively
Knowing how to improve project closeout starts with recognizing that it doesn’t begin with a checklist at the end. It starts by building systems that make closeout the natural result of well-documented execution.
A better approach begins by shifting from reactive reconciliation to proactive oversight.
For example, instead of waiting for finance to flag errors, PayShepherd identifies non-compliance as soon as a contractor submits their entry. If backup is missing or a required approval is skipped, it’s flagged immediately. That gives field teams the chance to correct or validate the issue while it’s still fresh.
The platform also enables pre-certified invoices. Instead of reviewing documents and spreadsheets in isolation, invoice packages are automatically created with attached backup and validated rates. What used to be an hour of hand-entry becomes a quick review and signoff. This doesn’t just reduce effort. It prevents delays, shortens the payment cycle, and makes everyone’s job easier.
What teams need to do early to streamline project closeout
To prevent closeout delays and disputes, teams should focus on a few core practices throughout the project lifecycle:
- Capture documentation as work is performed, not after
- Make compliance requirements visible and consistent across teams
- Validate hours, rates, and approvals before invoicing
- Use pre-certified invoices with complete backup to reduce review time
- Ensure contractors know what’s expected and have the tools to stay aligned
When these steps are built into everyday execution, closeout becomes easier, faster, and more predictable. These steps also form the foundation of any effective project closeout checklist.
Bringing teams together for a stronger finish
One of the most common challenges during closeout is aligning the various internal and external stakeholders who touched the project. Operations wants to move on to the next job. Finance needs clean data for accruals. Procurement is looking to wrap up contracts. Contractors are waiting for payment.
If these groups haven’t been aligned throughout the project, closeout becomes the first time they all look at the same data. That’s when problems surface. Questions arise that no one has time to answer. The cleanup process begins.
Improving closeout isn’t about adding more checkpoints. It’s about building a structure where each group has the information they need, when they need it. That enables faster turnaround, better decisions, and fewer rounds of back-and-forth.
When documentation is complete, systems are integrated, and contractor expectations are clearly managed, each stakeholder can focus on their role. Operations doesn’t need to recheck time entries. Finance doesn’t need to decode contractor spreadsheets. Contractors know what to expect and how to deliver it. Project leaders can step back, confident that closeout will run as expected.
Project closeout doesn’t have to be painful
Project closeout doesn’t have to be a scramble. It doesn’t have to rely on memory, inbox searches, or after-hours reconciliation work. When the right systems are in place, closeout becomes a formality. It’s the final step in a well-managed process, not the beginning of a new firefight.
By embedding compliance, traceability, and contractor alignment throughout the project lifecycle, you can avoid the common bottlenecks that delay handoff and frustrate your teams.
If you’ve experienced closeout pain, you’re not alone. Many of the organizations we speak with across energy, mining, and heavy industry are looking for ways to simplify this phase without compromising control.
There is a better way. Let’s explore how to make project closeout feel less like a bottleneck and more like a milestone.