"Who doesn't claim all the money due to them? Who waits to claim money owing? Well some contractors don't claim all the money owing, or submit their valuation claims late."
Many construction projects fail to submit their monthly valuations or progress claims on time or fail to claim all the revenue they are entitled to. This usually results in the contractor having a negative cash flow which impacts the company's operations. Imagine not claiming all the money due to you or your company? Seems hard to believe! But it happens more often than you think.
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Maximising construction valuations
Where possible construction projects should maximise the revenue claimed in the monthly valuations by:
1. making sure that all work is claimed
2. over-claiming work ahead of time where possible
3. ensuring milestones are met so that they can be incorporated in the payment
4. making the valuation date as late in the month as possible
5. ensuring that variations and claims are submitted and approved quickly so that they can be claimed
6. claiming for unfixed materials where applicable
7. claiming as much of the indirect costs or preliminaries as possible
"Money in your bank account is better than in your client's"
Remember, it’s better for the contractor to have the money sitting in their bank account than in the client’s. However, when compiling cost reports, ensure the over-claims in the valuation are excluded from the revenue used in the report.
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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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