Platform · operations

Committed cost, visible before the invoice

A spend report built from posted invoices is always behind, because the largest costs — subcontracts and material orders — are committed long before anyone bills you. Purchasing exists so that commitment is a number in your job cost and cash forecast rather than a fact somebody remembers.

bank feedmatched ledger itemACH CREDIT NORTHWIND 4820$48,200.00exactINV-10442DEP 0819 BATCH 77$31,180.00splitINV-10455 + INV-10460SQ *FULTON SYS$8,940.00fuzzyINV-10471WIRE IN REF 9920134$126,000.00unmatched → exception queueNo candidate — held for a personexact and split match automatically · fuzzy proposes and waits · unmatched never guesses
Committed cost in job costingThree-way matchingOff-contract spend flagged

What it does

Six things, specifically.

Requisitions

A request with a requester, a need-by date, and a coding proposal, routed for approval before a commitment exists rather than after somebody has already ordered.

Purchase orders

Correct vendor, contracted pricing pulled from the agreement, right GL coding and dimensions, and delivery terms that actually apply to that supplier.

Receiving

Full, partial, and over-receipt handled distinctly, with quantity variances recorded against the line rather than absorbed into the total.

Three-way matching

PO to receipt to invoice, with configurable tolerance. Variances are itemised to the line that caused them instead of blocking the whole document.

Committed cost

Open POs and subcontract balances appear in job cost and cash forecasting, which is what turns cost-to-complete from an estimate into a calculation.

Off-contract detection

Buying at list when you hold a negotiated rate, or from a new vendor when an approved one supplies the same thing. This is where most recoverable savings sit.

Why committed cost is the point

Most companies below $100M run purchasing informally — an email, a verbal approval, a PO raised afterwards to satisfy the finance team. It works, in the sense that things get bought, and it means nobody knows what has been committed until the invoices arrive.

The consequence is not overspending in the abstract. It is that project cost-to-complete is a project manager’s estimate wearing the authority of an accounting number, and that cash forecasting misses outflows already promised. Both are decisions being made on incomplete information for a reason that is entirely fixable.

Without committed cost, cost-to-complete is an estimate dressed as an accounting figure. The invoices confirm what you already spent rather than telling you anything.

Where the savings actually are

Procurement software is usually sold on negotiating leverage, which matters above the mid-market. Between $10M and $150M the recoverable money is almost entirely in three unglamorous places: buying off-contract when a negotiated rate exists, paying prices that drifted above an agreed schedule, and duplicate vendors supplying the same thing at different rates.

None of those require negotiating harder. They require noticing, consistently, across thousands of transactions — which is the shape of work a person does badly and software does well. In our engagements this is reliably the fastest measurable return in purchasing.

Approval before commitment, not after

The distinction between a requisition and a purchase order matters more than it sounds. A requisition is a request that has not yet created an obligation; a PO is a contractual commitment. Approving after the PO exists is approving something already done.

Getting the sequence right is mostly a process change rather than a software one, and it is the change that most reduces surprise spend. We will push for it and it is your decision whether the organisation will tolerate it.

Limits

Where this does not help.

Not strategic sourcing

RFQs, supplier scorecards at scale, and category management are a specialist discipline. We handle transactional procurement and the analysis that surfaces leakage.

Not warehouse management

Receiving against a PO is not bin-level control, wave picking, or cycle counting. If you need those, that points to Acumatica or NetSuite.

It cannot enforce a process nobody follows

If purchasing is done by text message and the PO is raised afterwards, software records that faithfully. The sequence change has to be a management decision first.

Questions

What people ask.

Do we need purchase orders to use this?
For committed cost and three-way matching, yes — a PO is what makes the commitment recordable. AP automation works without them, following a non-PO approval path you configure.
How does three-way matching tolerance work?
Configurable by percentage and absolute amount, per vendor or globally. Variances outside tolerance are itemised to the line rather than blocking the document.
Does committed cost flow into job costing?
Yes, which is the main reason contractors and services firms adopt it. Cost-to-complete becomes a calculation rather than an estimate.
Can it stop off-contract buying?
It flags it reliably and can require approval for it. Preventing it outright is a process decision — the software can make it visible and awkward rather than impossible.
Does it handle subcontracts?
Yes, as commitments with retainage where applicable, which matters for construction and is a common gap in generic purchasing modules.

See what you have already committed.

A year of AP detail is enough to surface duplicate vendors, off-contract buying, and pricing that drifted.