Final accounts: how to agree one without losing money

1. 01The original contract sum.
2. 02Variations, valued under the contract rules. See variations in construction.
3. 03Provisional sums, removed and replaced by the valuation of the work instructed. See provisional and PC sums.
4. 04Prime cost sums, adjusted to actual cost, with profit adjusted and attendance usually not.
5. 05Fluctuations, where the contract provides for them.
6. 06Loss and expense, claimed and assessed under its own clause.
7. 07Deductions. Liquidated damages, contra-charges, uncorrected defects.
8. 08Retention, released in full once the making good certificate is issued.

Everything on that list should already exist as an agreed document. An account assembled from memory at the end is an account that will be argued line by line.

Because after it the final certificate becomes conclusive evidence on the matters the contract states, which usually include that the quality of work is to the satisfaction of the contract administrator where that was a matter for their opinion, and that all extensions and loss and expense have been given effect.

Conclusive means it cannot be reopened, even if it is wrong. Adjudication, arbitration or litigation must be commenced within the window to preserve the position.

Twenty-eight days from issue. Not from when somebody opened the envelope, and not from when the argument started.

NoteStarting an adjudication purely to stop the clock is a recognised and legitimate step where agreement is close but not reached. It preserves the right without ending the negotiation.

1. 01Build it during the job. Every instruction valued and agreed as it happens, not saved up. An account agreed in pieces is agreed; one presented whole is negotiated.
2. 02Agree the measure before arguing the rate. Two arguments at once settles neither.
3. 03Close variations individually. A signed valuation on each is one fewer line in dispute at the end.
4. 04Submit loss and expense with its substantiation. Timesheets, plant records, invoices. A prolongation claim with no records behind it is a number.
5. 05Deal with deductions head on. Ask what is being deducted and on what basis, in writing, early.
6. 06Set a meeting with authority in the room. Accounts settle when both people present can say yes.

The single largest factor is whether the records exist. Site diaries, signed daywork sheets, attendance records, delivery notes, photographs and correspondence, all made at the time, decide most of the disputed lines before anybody argues about them.

Every row is a decision made months before the account is prepared. Almost nothing on that list can be recovered at the negotiation itself. The account is really settled during the job.