Question – Final account negotiations:
“We’ve come to the final account. The employer argues the amount due is substantially lower than our costs, so we need to prepare a claim. We’ve never been in this situation before, so don’t know where to start. What are the key things we need to include?”
Answer:
Firstly, let’s not jump to conclusions and assume that a claim needs to be prepared. Has a detailed final account submission been drafted and forwarded to the client? Usually, a first draft of an assessment of the final account will be full of differing opinions, assumptions, and potential errors as to what work has, should have, and wasn’t completed. Let’s take stock and provide the employer with all the facts.
If it has been left to the end of the project to seek agreement on all elements of the final accounts, then it can often be a complicated, time-consuming, and adversarial process, often resulting in disputes.
The process can be made substantially easier if adjustments to the scope of work and ultimately the contract sum are agreed upon as the project progresses rather than saving them up for the end.
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