Final Accounts for capital construction projects are prepared to show the final cost of projects that have been completed by the contractors. Final Accounts include the costs associated with rectifying defects identified during the defect liability period, all scope of work additions, alterations, deductions resulting from project changes and other related payments as stated in the contract agreements. Hence, the assessment and agreement of Final Accounts, is usually of the utmost importance to both the clients and contractors.
For a contractor, delays in doing the final account will not only damage the relation between the contractor and project owner but it will have drastic financial impacts on the contractor, subcontractors, suppliers and other entities in the project’s supply chain. For example, delays in Final Account may cause problems to contractor in making working capital and eventually lead to bankruptcy.
To reduce the likelihood of encountering delays in preparing the final account, it is recommended to have a predefined checklist that will be used by the project owner, project management consultant, supervision consultant and contractor to ensure that all required records and documents needed to prepare the final account had been available.
Using a Project Management Information System (PMIS) like PMWeb a checklist will be created to identify all items needed to prepare the final account. The checklist reflects the accumulated knowledge and lessons learned in preparing final accounts as well as solutions to the issues encountered in preparing those final accounts. The checklist will list all required items with along with a field that to confirm if those requirements were provided.
PMWeb custom form builder will be used to create the Final Account Checklist. This will enable to group the required items into separate tables if they need to be completed by different entities and/or individuals. Having separate tables will allow restricting access to each table so only the authorized individuals can update the requirements status. Of course, there is also the option to create sperate checklist forms that will only display the required Final Account items for each entity or individual. A report will be then created to consolidate all those checklist forms.
In addition, other data fields can be added to the checklist header, body or tables. Those data fields could be text, numeric, currency, Boolean, date and values to be selected from a predefined selection list. This will ensure that all needed information is being captured in the right format by the right entity and/or individual.
Similar to all types of business processes created using PMWeb, the Final Account Checklist business process can be also be attached with its supportive documents. Those could include drawings, specifications, equipment catalogues, pictures, test results, among others.
In addition, links to PMWeb records for all types of relevant business processes managed in PMWeb can be also added. For example, those could include defects report, progress invoices, non-compliance reports, site work instructions and others.
It is highly recommended that all supportive documents, regardless of their type or source, get uploaded and stored on PMWeb document management repository. PMWeb allows creating folders and subfolders to match the physical filing structure used to store hardcopies of those documents. For example, there could be a folder for Contractor Performance Evaluation with sub-folders for each period where the performance evaluation was carried. This will enable assigned the access permission rights for each folder or sub-folder.
PMWeb workflow can be assigned to the Final Account Checklist to share the form with the individuals who have a role in completing the checklist or a role in reviewing and approving the completed checklist. The assigned workflow will map the submit, review and approve tasks, role or roles assigned to each task, task duration, task type and actions available for task.
About the Author
Bassam Samman, PMP, PSP, EVP, GPM is a Senior Project Management Consultant with 40-year service record providing project management, project controls services and project management information system to over than 200 projects with a total value in excess of US $100 Billion. Those projects included Commercial, Residential, Education and Healthcare Buildings and Infrastructure, Entertainment, Hospitality and shopping malls, Oil and Gas Plants and Refineries, Telecommunication and Information Technology projects. He is thoroughly experienced in complete project management including project management control systems, computerized project control software, claims analysis/prevention, risk analysis/management (contingency planning), design, supervision, training and business development.
Bassam is a frequent speaker in topics relating to Project Management, Strategic Project Management and Project Management Personal Skills. Over the past 40 years he has lectured at more than 350 events and courses at different locations in the Middle East, North Africa, Europe and South America. He has written more than 300 articles on project management and project management information systems that were featured in international and regional magazines and newspapers. He is a co-founder of the Project Management Institute- Arabian Gulf Chapter (PMI-AGC) and has served on its board of directors for more than 6 years. He is a certified Project Management Professional (PMP) from the Project Management Institute (PMI), a certified Planning and Scheduling Professional (PSP) and Earned Value Professional (EVP) from the Association for the Advancement of Cost Engineering (AACE) and Green Project Management (GPM).
Bassam holds a Masters in Engineering Administration (Construction Management) with Faculty Commendation, George Washington University, Washington, D.C., USA, Bachelor in Civil Engineering – Kuwait University, Kuwait and has attended many executive management programs at Harvard Business School, Boston, USA and London Business School, London, UK.