Level 3 - Commercial Management of Construction Flashcards
What are cost value reconciliations? Explain how they work?
Cost Value Reconciliations (CVR) are carried out in order to monitor and measure expenditures against budgets on construction projects.
A measurement of the actual costs involved in a project are compared against the value of the works including profit to show a bottom line, in a similar way to a balance sheet for a company.
They are typically used by contractors to measure profitability and are reported to the management team, usually around the time of interim valuation of the works completed to date, and again at completion of the final account.
They can also be used to inform the management team of the bottom line on a project when negotiating final accounts.
What is a cash flow and how would you put one together?
Cash flow refers to the movement of money in and out of your business in terms of income and expenditure. Ideally, you want to have a positive cash flow – meaning that more money is coming in to the business than goes out.
The programme would be reviewed to define when money would be coming in and out of the business
What would a contractors cashflow be?
Contractor cash flow
Contractors have to have money coming in to pay suppliers and subcontractors and for the day-to-day running of the business.
Carillion’s cash flow was very low, leading to their liquidation in January 2018. At the start of any contract, a payment scheme or table is drawn and agreed with the client or their quantity surveyor,
What is the BCIS?
The Building Cost Information Service, known as BCIS, is a provider of cost and price information for the UK construction industry. It is a part of the Royal Institution of Chartered Surveyors.
What is a TPI?
Tender Price index - details inflation rates etc.
