A Schedule of Values (SoV) is a detailed breakdown of the total contract sum, divided into specific work items with assigned values. It is used to track project progress and calculate phased payments as work is completed.

How a Schedule of Values Affects Cash Flow

The SoV plays a critical role in managing a project’s cash flow. It allows contractors to request interim payments based on completed work milestones. By breaking down the contract into individual components, it also provides transparency for both contractors and clients, ensuring that payments are linked directly to work progress.

Best Practices for Managing a Schedule of Values

A well-prepared SoV should be detailed, clearly outlining each phase of work. Regularly updating the SoV as the project progresses will ensure accurate billing. Contractors should also ensure that each value assigned to the work items is reasonable and reflective of the actual cost. Related Terms: Interim Payment, Progress Payment

FAQs

Why is a Schedule of Values important in construction contracts?

A: A Schedule of Values ensures that payments are tied to specific work completed, providing financial transparency and helping manage project cash flow.

How is a Schedule of Values used to calculate payments?

A: The SoV breaks the total contract into work items, and payments are made based on the percentage of completion for each item.

Schedule of Values Definition

How a Schedule of Values Affects Cash Flow

Best Practices for Managing a Schedule of Values

FAQs

Why is a Schedule of Values important in construction contracts?

How is a Schedule of Values used to calculate payments?

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