A construction final account is not a negotiation with a number at the end. It is the contract sum, adjusted by every mechanism the contract provides, in the order the contract provides them. Where it is assembled that way it usually settles. In cases where it is assembled as a claim, it usually does not.
The difference is visible in the first page. An account that opens with the contract sum and works through adjustments can be checked line by line. One that opens with a total and explains it afterwards invites an argument about the total.
Start from the contract sum, not from the applications
The starting point is the contract sum as executed, not the last interim valuation and not the contractor's cumulative applications. Interim valuations are provisional by design and carry approximations that were acceptable monthly and are not acceptable finally.
From there, each adjusting mechanism is applied separately: variations, provisional sums expended, prime cost sums adjusted, remeasurement of approximate quantities, fluctuations if applicable, and loss and expense if any has been established.
Keeping these separate matters because they are proved differently. A variation is proved by an instruction and a valuation. A provisional sum is proved by expenditure. Loss and expense is proved by notice, by cause and by actual loss. Merging them removes the ability to test any of them.
Provisional sums are omitted before they are added
The mechanical step most often done carelessly is the treatment of provisional sums. The sum included in the contract is omitted in full, and the actual expenditure is added in its place.
Where that is done as a net adjustment, the account loses visibility of both figures, and nobody can see whether expenditure exceeded allowance or fell short. Shown gross, the reader sees the allowance, the expenditure and the difference on each item.
The same applies to prime cost sums and to approximate quantities. Every one of them should appear as omit and add, with the supporting evidence referenced.
Variations, one at a time
Each instruction is listed, valued under the applicable contract rule, and cross referenced to the evidence. Not grouped, not summarised, not presented as a schedule of totals.
The reason is practical. An account of eighty individually evidenced variations can be agreed in parts, and the parties can close forty of them in a morning and concentrate on the rest. An account presenting the same eighty as one figure has to be agreed in full or not at all.
Which valuation rule has been applied should be stated on each item. Most variation disputes are disagreements about the rule rather than the rate, and stating it either resolves the item or narrows it usefully. That hierarchy is set out in valuing a variation under the contract rules.
Deductions belong in the same document
Contra charges, defective work, unfixed materials, liquidated damages and any client incurred costs recoverable under the contract are part of the account and belong in it, evidenced to the same standard as the additions.
Presenting deductions late, or as a negotiating response, weakens them. Presented in the account from the start, with the contractual basis stated and the evidence attached, they carry the same weight as any other adjustment.
Liquidated damages in particular depend on the extension of time position being resolved first. Deducting them while time claims remain open produces an argument about two things at once and settles neither.
The order of work
Establish the contract baseline and its documents. Then list every instruction and every provisional and prime cost sum. Next, then value each one. Then deal with time. After that, then deal with loss and expense, which depends on the time position. Then apply deductions.
Doing it in that order means each stage rests on a settled foundation. Equally, doing it in any other order means revisiting earlier work as later questions resolve, which is where months disappear.
Where an account has already broken down, this same sequence is how it gets rebuilt, and that work is described under commercially contentious.
What good looks like
A final account somebody else can check without asking questions. Every line traceable to a document, every valuation showing its rule, every deduction showing its clause, and a summary that reconciles to the contract sum.
Presented that way, the areas of genuine disagreement become visible immediately, and they are usually far fewer than either party expected. Most of the volume in a contested account is items that were never properly evidenced rather than items that are actually in dispute.
The alternative is described in variation claim exposure: one large number, no supporting structure, and an argument that runs for a year.
What this means for you
Start assembling during the job, not at the end. An account built month by month from valued instructions is largely complete on the day of practical completion, and the remaining work is arithmetic.
If you are already at the end with nothing assembled, resist the temptation to open with a figure. Build the document first. It takes weeks rather than days, and it is the difference between a settlement and a dispute. Our approach sits under final accounts and disputes.
Sitting on an account that will not close?
Send the contract, the instructions and the last agreed valuation. We will tell you what the account should look like and where the gaps are.