Why do final accounts settle so low?
A low offer can come from gaps in your evidence, genuine differences in value, risk, or plain commercial pressure.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
If it is your own file that is thin, see what to do when a dispute is coming and your records are thin.
The answer
Do not assume every cut is tactical; look at the reason behind each one. Variations may be valued on different evidence. Your records may show the work was done but not what it cost. A global figure, one total for several causes, may mix in causes your main contractor is not responsible for. Contra-charges need checking against the subcontract and the evidence. Retention may be released on its own separate events. And some differences are simply honest differences in value. So keep and reconcile the file while the job is still running. Fill the gaps in your evidence while you still can. Then weigh any concession against the cost and uncertainty of carrying on. A review before the account goes in, or of the assessment once it lands, shows you those choices. It does not promise a higher figure or payment.
Example
Illustrative example. The scenario and figures are invented.
The facts
A facade subcontractor puts in a £300,000 account. It includes £90,000 of variations first recorded in month 11, a global delay figure and unsigned daywork sheets. The account is reviewed before it goes any further.
What happens
- The review labels each item as supported, disputed, conditional or without a source.
- The review asks whether recording the variations late has a consequence under the subcontract.
- The position is revised as evidence is found.
The outcome
The account carries a label against every item and a stated question on the late records. No offer, settlement or recovery is predicted from it.
On the next job, recording changes earlier would make the same check easier, though it would not guarantee agreement.
Our Final Account Dispute Prevention builds the account as the job runs and prices where it really stands before you table it.