The preparation of the Final Account is an ongoing process throughout the contract period, and is the process of calculating and agreeing any adjustments to the Contract Sum (the amount originally set out in the Contract to be paid to the Contractor for completion of the Works) so that the amount of the final payment can be determined.
Our Interim Cost Control Statements serve as the starting point for Final Account discussions.
The Final Account Statement will include:
- cost of agreed Variation/Change Orders,
- adjustment of Provisional Sums,
- re-measurement of provisional/approximate quantities,
- any loss and expense associated with extensions of time,
- any other items affecting total cost
From the builder’s perspective, he will try and ensure that all variations from his Sub-contractors and Suppliers are picked up and included in the Final Account. The builder will not want to enter Final Account negotiations without having accurate costs from their supply chain, although there may be no direct contractual link between the Contractor’s entitlement to be paid by the Employer, when compared with an obligation to pay their Sub-contractors and Suppliers.
Under the terms and conditions of our Standard Building Contract “the Contractor is to provide us with all documents necessary for the Final Account preparation within FORTY (40) days from the date of Practical Completion, and the Employer shall within TWENTY EIGHT (28) days issue a final payment to the Contractor of the remaining sum due”.