It is vital to the client and the design team that the project costs are effectively managed throughout the construction stage of the project. As Quantity Surveyors we keep the client informed at all stages of the project of the financial position of the contract at agreed regular intervals, usually monthly. The client is concerned not only with the current cost position but also the likely pattern of future payments over the contract period and the probable final total cost, in order that he may have sufficient funds available to finance and pay for the project. As the works proceed on site we will produce regular Financial Statements which keep the client up to date with the estimated total final cost of the project. The report is generally in two parts, the first considers the current position on how much money the client has already spent, and the second the probable final cost of the project. The cost report is crucially important in that it can forewarn the client of any future possible increases or decreases in the cost of the project. The financial statement will generally include the following items:
The adjustment of the above items will be either added to or deducted from the contract sum (less contingencies). In addition, any fluctuations provision, where applicable to the contract should also be included within the cost report. It is important that the clients forecast of total final cost includes all possible items.
Ri & Ri Quantity Surveyors offer to undertake on behalf of the Client all works entailed to settle the final account. We are involved in the final account preparation, submission & subsequent agreement on behalf of both private and public clients and contractors. We also undertake all work associated with final accounts and agreement on behalf of sub-contractors.
In basic terms a Final account in construction contracts is the agreed statement of the amount of money to be paid at the end of a building contract by the employer to the contractor. A final account brings about a sense of finality to the negotiations leading up to the agreement of the Final Account between the parties to the contract. In construction contracts it is generally common practice for both the Employer (and the Employer's representative) and the Contractor to sign the Final Account Statement to signify that the Final Account figure represents the full and final settlement of all claims etc. The settlement of the final account negotiations between the contractor, and the architect or quantity surveyor will in due course trigger the issue of the final account statement and ultimately, enable the architect to issue the final certificate. A quantity surveyor prepares the final account in the manner that is best suited for the particular project, with the original contract sum as the starting point. An important part of the contractor's quantity surveyor's work is the agreement of the final account. Under the terms of the contract the private quantity surveyor is responsible for its preparation, but in reality the best approach is for both the client's quantity surveyor and the contractor's quantity surveyor to work together to produce an agreed account. The contractor's quantity surveyor should be alert at identifying contract variations and work that should be reimbursed on daywork rates. Also the contractor's quantity surveyor should strive as far as possible to alleviate any possible delays in agreeing the final account. Under the terms and conditions of contract the contractor is to provide the architect or quantity surveyor with all documents necessary for the final account preparation not later than 6 months after practical completion. Within 3 months of receipt of these documents the architect or quantity surveyor is to prepare and ascertain the final account sum and send this to the contractor.
The bulk of the final account will generally consist of measured work priced at the original billed rates. If the contractor's quantity surveyor has reason to doubt the accuracy of any of the original billed items, he can make a request to the quantity surveyor for work concerned to be measured on-site. The adjustment of the contract sum in the final account normally falls under several relevant items, although the quantity surveyor must have regard to all the matters listed in the standard form of contract and conditions. The contract conditions tabulates all the matters that shall be dealt with in the final account in order to adjust the contract sum in accordance with the conditions.
All relevant items must be shown separately in the final account, and the nett amount of each variation and amounts due to each nominated subcontractor and nominated supplier listed. When preparing the final account the quantity surveyor should give the contractor's quantity surveyor the opportunity to be present when measurements and details are taken or recorded, so that the document is prepared in full liaison with the contractor. Delays in the settlement of the final account represent additional cost to the contractor and in the majority of cases the employer is anxious to know his ultimate financial commitment. The architect and the quantity surveyor have a contractual responsibility under the contract to keep to the date stipulated in the contract for completion of the final account and the contractor should produce every assistance in the prompt provision of subcontractors and suppliers accounts, agreement of measurement and prices, and the supply of all necessary supporting data.