In today’s energy landscape, Investor-Owned Utilities (IOUs) are under enormous financial pressure. Massive capital investment is required to support initiatives like grid modernization, undergrounding, electrification, and the buildout of infrastructure for EVs and data centers. For CFOs and finance teams, the stakes are high: every dollar of capital must be deployed efficiently, and every delay in capitalization can drive up unnecessary costs.
Yet a silent drain on utility financial performance persists — and it’s hiding in plain sight within Construction Work in Progress (CWIP).
The Hidden Cost of Work Order Closeout Delays
Most utility CFOs know the Allowance for Funds Used During Construction (AFUDC) — the capitalized interest accrued on projects during construction. While a normal part of the capitalization process, these charges quickly become problematic when work orders are not closed out promptly.
Utilities commonly face 3 to 6 months or more of delays in closing out construction work orders and booking assets. Why? The processes for capturing, reviewing, and integrating “As-Built” data into core systems like GIS and Work Management Systems (WMS) are manual and paper-based or rely on overburdening crews with multiple disconnected applications. These delays increase AFUDC charges, distort CWIP balances, and complicate rate recovery. Over time, they erode capital efficiency and increase the total cost of delivering critical infrastructure.
Financial Impacts Across the Organization
Delayed work order closeouts have a ripple effect that CFOs and finance leaders can’t ignore:
- Higher AFUDC costs due to extended time in CWIP
- Delayed capitalization of assets, distorting financial reporting and delaying depreciation
- Missed quick pay discounts on contractor invoices
- Inaccurate asset valuations impacting property tax assessments
- Reduced transparency for regulators and auditors
- Increased risk of upcharges from contractors due to uncontrolled and / undocumented “as-built” changes
Adjusting clearing rates might offer a short-term offset, but it doesn’t address the root cause: the inefficiency and inaccuracy of manual work order processing.
A Digital Path Forward
Enter Digital Construction Management (DCM) — a modern solution that transforms how utilities capture, process, and integrate construction data.
With Locusview’s DCM platform, utilities empower field crews to digitally capture asset data and “as-built” information in real time using mobile devices equipped with barcode and QR scanners. Data is validated at the point of entry, reviewed and approved digitally, and seamlessly transmitted to GIS and WMS systems. Post-construction processing time drops from months to days.
What that Means for Utility Finance Leaders
For CFOs and their teams, the benefits are clear and measurable:
- Significantly reduced AFUDC charges through faster work order closeout
- Improved capital efficiency by accelerating asset booking and depreciation
- Cleaner audit trails with validated, digital records aligned with systems of record
- Reduced risk and uncertainty in financial planning and rate case preparation
- Faster contractor payment processing, avoiding penalties, and contributing to strong vendor relationships
In an environment where capital investment is accelerating and regulatory scrutiny is increasing, DCM isn’t just an operational upgrade — it’s a strategic financial advantage.
The Bottom Line
The longer construction data lives on paper, the more it costs you.
If your utility is still relying on manual processes to manage work order closeout, it’s time to rethink your approach. Digital Construction Management enables utilities to modernize not just field operations, but the financial health of the enterprise — starting with better control over AFUDC and CWIP.
In today’s energy landscape, Investor-Owned Utilities (IOUs) are under enormous financial pressure. Massive capital investment is required to support initiatives like grid modernization, undergrounding, electrification, and the buildout of infrastructure for EVs and data centers. For CFOs and finance teams, the stakes are high: every dollar of capital must be deployed efficiently, and every delay in capitalization can drive up unnecessary costs.
Yet a silent drain on utility financial performance persists — and it’s hiding in plain sight within Construction Work in Progress (CWIP).
The Hidden Cost of Work Order Closeout Delays
Most utility CFOs know the Allowance for Funds Used During Construction (AFUDC) — the capitalized interest accrued on projects during construction. While a normal part of the capitalization process, these charges quickly become problematic when work orders are not closed out promptly.
Utilities commonly face 3 to 6 months or more of delays in closing out construction work orders and booking assets. Why? The processes for capturing, reviewing, and integrating “As-Built” data into core systems like GIS and Work Management Systems (WMS) are manual and paper-based or rely on overburdening crews with multiple disconnected applications. These delays increase AFUDC charges, distort CWIP balances, and complicate rate recovery. Over time, they erode capital efficiency and increase the total cost of delivering critical infrastructure.
Financial Impacts Across the Organization
Delayed work order closeouts have a ripple effect that CFOs and finance leaders can’t ignore:
- Higher AFUDC costs due to extended time in CWIP
- Delayed capitalization of assets, distorting financial reporting and delaying depreciation
- Missed quick pay discounts on contractor invoices
- Inaccurate asset valuations impacting property tax assessments
- Reduced transparency for regulators and auditors
- Increased risk of upcharges from contractors due to uncontrolled and / undocumented “as-built” changes
Adjusting clearing rates might offer a short-term offset, but it doesn’t address the root cause: the inefficiency and inaccuracy of manual work order processing.
A Digital Path Forward
Enter Digital Construction Management (DCM) — a modern solution that transforms how utilities capture, process, and integrate construction data.
With Locusview’s DCM platform, utilities empower field crews to digitally capture asset data and “as-built” information in real time using mobile devices equipped with barcode and QR scanners. Data is validated at the point of entry, reviewed and approved digitally, and seamlessly transmitted to GIS and WMS systems. Post-construction processing time drops from months to days.
What that Means for Utility Finance Leaders
For CFOs and their teams, the benefits are clear and measurable:
- Significantly reduced AFUDC charges through faster work order closeout
- Improved capital efficiency by accelerating asset booking and depreciation
- Cleaner audit trails with validated, digital records aligned with systems of record
- Reduced risk and uncertainty in financial planning and rate case preparation
- Faster contractor payment processing, avoiding penalties, and contributing to strong vendor relationships
In an environment where capital investment is accelerating and regulatory scrutiny is increasing, DCM isn’t just an operational upgrade — it’s a strategic financial advantage.
The Bottom Line
The longer construction data lives on paper, the more it costs you.
If your utility is still relying on manual processes to manage work order closeout, it’s time to rethink your approach. Digital Construction Management enables utilities to modernize not just field operations, but the financial health of the enterprise — starting with better control over AFUDC and CWIP.
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