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File every supplier price increase the day it arrives

A supplier's increase letter is your first and best evidence that a price moved, and when. Filed the day it arrives, beside the quote it replaces, it tells the story a year later that an email search rarely will.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

Why it matters

A price rise claim has to prove three things: what you priced, when the price changed and what you then paid. The increase letter is the only document that dates the change. It usually lands in a buyer's inbox as a notice to all customers, and is read and forgotten. By the final account the buyer may have left, and the tender quotes sit in an estimating folder nobody links to the job. The invoices show a higher price without saying why. Filed together as they arrive, the three documents almost prove the claim on their own.

How to do it

  1. Ask your buyer to forward every supplier increase notice to the job's commercial folder the day it arrives.
  2. File it beside the tender quote for the same material, with the date the new price takes effect.
  3. Set that material's invoices against the tender rate each month, and note the difference.
  4. Check the day the letter arrives whether your subcontract needs a notice for it.

Example

Illustrative example. The scenario and figures are invented.

The facts

A ceilings subcontractor's subcontract carries the labour and materials fluctuations option. Its grid and tile supplier sends increase letters in May and in September.

What happens

  1. Each letter is filed the day it arrives, beside the tender quote for grid and tile, with its effective date.
  2. The monthly invoices are set against the tender rates, and the difference is recorded each month.
  3. Notice is given to the main contractor within a week of each letter, with the letter attached.

The outcome

At the final account the £11,600 adjustment is agreed in one meeting. The letters, quotes, invoices and notices sit together in the order they happened.

To have this set up for you, see our Price Rise Loss Prevention service.