Many projects fail to submit their monthly valuations 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.
Where possible the projects should maximize the revenue claimed in the monthly valuations by:
- Making sure that all works are claimed
- Claiming for every detail of work done as possible
- Ensuring milestones are met so that they can be incorporated in the payment
- Making the valuation date as late in the month as possible
- Ensuring that variations and claims are submitted and approved quickly so that they can be claimed
- Claiming for unfixed materials where applicable
- Claiming as much of the indirect costs or preliminaries as possibleRemember, 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.