The final account statement is a document that details the final amount due for work completed. It can be issued at any time after practical completion, but it is usually issued at the end of the project. This article will explain why you need a final account statement and what information it should contain.
Final account statements are legally binding documents
A final account statement is a legally binding document that can be used in court if the owner and contractor can’t agree on the payment amount.
The final account statement should be agreed after all work has been completed, but before any of the money due to the contractor has been paid out. If you make payments without agreeing on a final account, there’s a risk that some or all of your payments might be classed as non-recoverable liquidated damages (which are explained below).
A final account statement should be agreed upon after work is completed
A final account statement should be agreed after work is completed. A final account may be issued at any time, but usually it will be on completion of the works.
A legally binding document, the final account statement must contain all charges due under the contract and invoices for work done since the last interim payment was made.
If a final account is not agreed and payments are made, the contractor may be at risk of default and liquidated damages.
If a final account is not agreed and payments are made, the contractor may be at risk of default and liquidated damages.
The contractor may be in breach of contract if no final account is agreed upon for works completed under clause 11(4). This could leave the contractor liable to pay liquidated damages (see “What have liquidated damages?” below), which can often amount to hundreds or thousands of pounds. In addition, the contractor could also face other sanctions, such as being held responsible for any loss suffered by the employer due to their failure to complete the contract correctly (another example is where it would cost more than expected to remedy any defects) or even have a claim brought against them by an employee who has suffered injury or death because something has gone wrong with their work.
You need a completion certificate to close a final account statement
A completion certificate is a legal document signed by both parties. It confirms that the project has been completed to the satisfaction of both parties.
The completion certificate is issued after practical completion and agreement on the final account statement.
Quantity surveyors are involved in the final account statement.
The quantity surveyor is responsible for checking the final account statement. The quantity surveyor will check that it is correct and accurate, as well as ensure that the contract sum and value are correct. If there are any issues with the final account statement, they should be resolved before it’s signed by both parties so that no problems arise later in a project.
The final account will include detailed information on all that is due to the contractor; this includes measured works, deductions and variations.
The final account will include detailed information on all that is due to the contractor; this includes measured works, deductions and variations.
The final account will include the total amount due to the contractor as well as any further payments they are due.
The final account highlights how much retention is released at completion and after the practical completion
The final account is a document that details how much retention is released at completion and after the practical completion of any other outstanding works. The amount of retention released depends on how long after contract signing has passed, and whether any issues were encountered during the project.
In addition to highlighting when retention is released, it also outlines what happens when there are no issues with the project or if any changes have been made since the start of work.
The final account should be signed by all parties involved in order for it to become valid.
The final account may be checked by comparing it with the contract sum and value.
The final account may be checked by comparing it with the contract sum and value.
The final account may take into account any items which have not been paid in full, as well as any items which have been paid in full but which do not relate to works completed or goods delivered under the contract, e.g., materials ordered for future use or for retention elsewhere
Conclusion
The final account is a legally binding document and therefore, it should be consulted with care before agreeing to any final payments. A final account is usually issued on completion of the works but can be issued at any earlier date if required by either party.
