Why three-way match fails in construction. And it’s not the PM’s fault (Part 1)
I’m a carpenter by trade, but I’ve evolved in the supply chain world. Two realities I’ve experienced from the inside.I’ve implemented procurement and financial control systems in manufacturing and enterprise environments: Coupa, Ivalua, Ariba, Dynamics, WMS, and others. Three-way match, purchase order reception, and accruals; these are not controversial concepts. They’re table stakes.
So when I started working closely with the AEC industry, I was genuinely surprised by how difficult procurement felt for project teams.
Mention “three-way match” to an engineering project manager, and you can almost feel the tension rise. Like announcing a dentist appointment. At first, I assumed it was a resistance to change or a lack of process maturity.
It turns out I was wrong.
After spending months working alongside project managers, filling their shoes, and living inside their constraints, I now understand the problem very clearly. The issue is not discipline. It’s design.
The PM’s reality vs. the system’s expectations
Let’s walk through a very common situation.
- A project manager:
- Builds a WBS to structure the project
- Raises a purchase requisition
- Navigates a catalog that has little meaning in a project context
- Gets the PO issued
So far, so good.
Weeks later, the subcontractor calls:
“Finance rejected our invoice. The service hasn’t been received in the system.”
Think about that for a moment…
The PM already:
- Structured the work
- Justified the spend
- Had his budget approved
- Followed the procurement process
- Managed the subcontractor relationship
Now they’re being asked to “receive” something in the system that:
- Was performed over weeks ago
- Was not delivered as a tangible good
- Often isn’t clearly measurable at the time
All of this while:
- Managing 10+ active projects
- Responding to dozens of RFQs that directly impact their P&L
- Being accountable for schedule, margin, and client satisfaction
From the PM’s perspective, this isn’t control. It’s like being stuck in traffic: unavoidable, time-consuming friction that drowns out what actually matters.
Where the breakdown really happens
The procurement process used in construction is largely inherited from industries where:
- Scope is stable
- Deliverables are discrete
- Goods are received at a dock
Construction doesn’t work that way.
In many projects:
- The WBS is not fully detailed at the time of procurement
- Services progress continuously, not in clean milestones
- The invoice often becomes the first “clear” signal of what was actually delivered
Meanwhile, finance is stuck waiting:
- Waiting for reception to post accruals
- Waiting to recognize revenues properly
- Waiting to invoice the client
And everyone is under pressure. Cash flow. Cash flow. Cash flow.
This is not a people problem
It’s tempting to blame the engineers. Or the PM. Or the finance team. But that misses the point.
No amount of training will fix a process that forces project teams to confirm information they don’t yet have, in a format that doesn’t match how work is executed.
When systems are designed primarily around accounting events instead of project reality, friction is inevitable.
The way forward: process first, then technology
I won’t dwell on why PO reception matters for revenue recognition or financial compliance; others have covered that well.
What matters here is acknowledging that forcing traditional procurement mechanics onto project execution without adaptation will always fail.
Yes, technology plays a role. Yes, AI can help.
And yes, I am a strong believer in AI, long before it became fashionable.
But there is no “easy button.” Real improvement comes from:
- Redesigning processes around how projects actually progress
- Reducing cognitive load on project managers
- Aligning financial controls with execution signals, not after-the-fact corrections
- Supporting change management, not just system deployment
AI can amplify good design. It cannot fix bad process.
Final thoughts
If your procurement process feels like a constant battle between project teams and finance, that’s not a sign of immaturity.
It’s a signal that the system was never designed for construction in the first place.
There is a better way; but it starts by respecting the reality of those delivering the work.
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