Construction project managers, or site managers, have a multitude of duties and tasks to perform. Unfortunately many managers concentrate on delivering the construction project and some of their financial duties are neglected. This often impacts the projects profitability and can also negatively impact the company's profits and cash flow.
It's therefore important that the Project Manager should:
1. ensure the monthly valuation claims are prepared correctly and submitted to the client in the correct format, with the correct paperwork, and on the due date specified in the contract
2. ensure the client pays the valuation within the specified time frame
3. monitor the project’s cash flow since a negative cash flow can impact the contractor’s ability to trade successfully
4. ensure variations are submitted within the time specified in the contract document
5. should review all variations, checking they have considered all the costs and the claim has been formulated correctly, referencing the correct reasons for the claim, quoting the necessary drawings and contract clauses, and including all the relevant calculations
6. ensure the client issues a change order for variations
7. prepare a project budget
8. when undertaking work on a cost-recovery contract, ensure all the costs for this work are included, gathered on a daily basis and approved by the client as they are incurred
9. make sure cost reports are prepared monthly, are accurate, and provide sufficient information for losses or profits to be tracked
10. analyse the cost reports and take appropriate action to prevent further losses and where possible to recover the losses incurred
11. check that materials are reconciled, and monitor losses so that appropriate action can be taken to prevent further losses
12. undertake basic daily site costing to ensure the work is done in a cost efficient manner
13. provide feedback to project staff of where the project is losing or making money
14. ensure goods, services and expenses are collated, and paid correctly and on time
15. check, approve, and submit personal expense claims as soon as possible with supporting documentation
(This is a summary of the Financial section in the book 'Successful Construction Project Management - The Practical Guide' by Paul Netscher)
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Copyright 2016 - The attached articles cannot be reproduced for commercial purposes without the consent of the author.
The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.
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