Financial Management in Construction Contracting

Financial Management in Construction Contracting
Andrew Ross & Peter Williams

This authoritative text provides a detailed insight into how construction companies manage their finances at both corporate and project level. It guides students and practitioners through the complexities of the financial reporting of construction projects within the constraints of accepted accounting practice. The book is written for non-accountants and from a contractor’s perspective and is equally relevant to subcontractors and main contractors.

The authors examine the relationship between the external annual accounts and the internal cost-value reconciliation process. CVR is covered in depth and the authors consider issues such as interim payments, subcontract accounts, contractual claims, final accounts, cash flow management and the reporting of the physical and financial progress of contracts.

A broad perspective of all the financial aspects of contracting is taken along with related legal issues and the authors explain how things operate in the ‘real world’. They describe good practice in financial control while at the same time being honest about some of the more questionable practices that can - and do - happen. The approach taken is unique as the financial management of construction projects is considered from the perspective of the contractor’s quantity surveyor. The book deals with the real issues that surveyors have to address when using their judgment to report turnover, profitability, cash flow, and work in progress on projects and the financial problems faced by subcontractors are frankly and pragmatically explored.

The payment and notice requirements of the Construction Act are explained in detail and relevant provisions of JCT2011, NEC3, ICC, DOM/1 and other standard contracts and subcontracts are also covered.

Financial Management in Construction Contracting addresses the wide variety of external factors that influence how construction companies operate, including government policy, banking covenants and the financial aspects of supply chain management. Cost reporting systems are described and real-life examples are used to illustrate cost reports, accrual systems and how computerised systems can be employed to provide the QS with information that can be audited.

This is the ideal core text for final year degree and post-graduate students and provides an invaluable reference source for all engaged in the financial management of construction projects.

This book’s companion website is at www.wiley.com/go/rossfinancialmanagement and offers invaluable resources for both students and lecturers:

• PowerPoint slides for lectures on each chapter
• Excel worksheets to practice what you learn
• Sample valuations and cashflows

Andrew Ross, BSc(Hons) MSc PhD MRICS MCIOB, Head of postgraduate programmes, School of the Built environment, Liverpool John Moores University. Andrew is a chartered quantity surveyor and chartered builder, after graduation he worked as a commercial manager for Balfour Beatty Building and financially managed projects ranging from refurbishment, adaptation of industrial facilities, health care and new build industrial building. He joined Liverpool John Moores University and has an MSc in Information Technology and a PhD in Construction Economics. He has published over 100 journal and conference papers on construction economics and procurement and is the joint author of three text books, Building Design Cost Management, Construction UK and Financial Management for Construction contracting. His current position at LJMU is head of post graduate programmes and he teaches construction project financial management to undergraduate and post graduate students.  He has successfully supervised many PhD students and has been an external examiner to numerous UK and overseas Universities for undergraduate, postgraduate and research degree courses.

Peter Williams is a Consultant and Lecturer with extensive practical experience in building, civil engineering and surveying. Formerly a chartered builder, chartered quantity surveyor and principal lecturer, he is now a writer, researcher, lecturer and consultant with particular interests in contracts and finance, delay analysis and health and safety management.