Commercial & Contract · Mandatory · Completion

Final Account Statement

The final statement of the adjusted contract sum including all measured works and variations.

Last reviewed: 29 March 2026 — This guide reflects UK law as of this date. JCT / NEC / Contract remains current with no amendments enacted as of 29 March 2026. Next scheduled review: 29 March 2027.

Legal basis	JCT Standard Building Contract 2024 (clause 4.27–4.30) & NEC4 Engineering and Construction Contract & the specific terms of the contract — the final account is the comprehensive financial reconciliation of all sums due under the contract
JCT timeline	Contractor provides all documentation required for the final account within 6 months of practical completion. The contract administrator prepares the final account within 3 months of receiving all necessary documents. The Final Certificate is issued within 2 months of the later of the end of the rectification period or the completion of making good.
Final Certificate	The JCT Final Certificate has conclusive effect — it is conclusive evidence that the quality of materials and workmanship are to the reasonable satisfaction of the contract administrator, and that all adjustments to the contract sum have been correctly made, unless proceedings are commenced within 28 days of its issue
Scope	The final account reconciles the original contract sum with all authorised adjustments: variations (additions and omissions), provisional sum expenditure, daywork, loss & expense, fluctuations, and any other contractual adjustments
Agreement	The final account should be agreed between the parties before the Final Certificate is issued — the Final Certificate states the final balance due from one party to the other and triggers the conclusive-effect provisions

1. Final Account Statement

The final account statement is the comprehensive financial reconciliation that closes the books on a construction contract. It brings together the original contract sum and every authorised financial adjustment that has occurred during the life of the project — variations, provisional sum expenditure, daywork, loss & expense, fluctuations, and any other contractual adjustments — to arrive at the agreed final account sum. The difference between the agreed final account sum and the total of all amounts previously paid determines the final balance due from one party to the other.

Under JCT 2024, the contractor is required to provide all documentation necessary for the preparation of the final account within six months of practical completion. This includes all variation accounts, daywork sheets, subcontractor final accounts, loss & expense submissions, and any other supporting documentation. The contract administrator then has three months from receipt of all necessary documents to prepare and issue the final account. The Final Certificate is issued within two months of the later of the end of the rectification period or the completion of making good defects.

The final account process is critically important because the Final Certificate has conclusive effect under JCT contracts. Once the Final Certificate is issued and the 28-day dispute window has passed without proceedings being commenced, the Final Certificate becomes conclusive evidence that the quality of materials and workmanship are to the reasonable satisfaction of the contract administrator and that all adjustments to the contract sum have been correctly made. Any disagreement about the final account must therefore be raised before the Final Certificate becomes conclusive.

Start at practical completion, not six months later

Although the contract allows six months for the contractor to submit final account documentation, best practice is to begin compiling the final account well before practical completion. Variations should be valued and agreed progressively throughout the project, not stockpiled for the end. Subcontractor accounts should be agreed as each subcontract package is completed. Loss & expense should be substantiated contemporaneously. By practical completion, the only outstanding items should be final measurements and the reconciliation itself. Projects that leave all financial matters to the final account stage typically experience protracted disputes, delayed Final Certificates, and cash-flow problems for the entire supply chain.

2. Structure

The final account statement should present the financial reconciliation in a clear, logical format. Each adjustment to the contract sum must be separately identified and supported by documentation. The following table sets out the typical structure.

Element	Detail
Original contract sum	The lump sum stated in the contract as the price for carrying out and completing the works. This is the starting point for the final account reconciliation.
Add: variations	The net value of all authorised variation instructions that added work to the contract scope. Each variation should be separately identified by instruction number, described, and valued in accordance with the contract valuation rules (e.g. JCT clause 5.6–5.10). Include a schedule of all variation instructions cross-referenced to valuations.
Less: omissions	The net value of all authorised variation instructions that omitted work from the contract scope. Each omission should be separately identified and valued. Omissions are deducted from the contract sum at the rates and prices in the contract bills or schedule of rates.
Add: provisional sums	The difference between the provisional sum allowances in the contract and the actual expenditure on provisional sum items. Defined provisional sums include an allowance for programming and preliminaries; undefined provisional sums do not. The contractor is entitled to an adjustment for any difference between the allowance and the actual cost.
Add: daywork	The value of work properly carried out on a daywork basis in accordance with the contract daywork provisions. Daywork sheets must have been submitted to and verified by the contract administrator within the contractual timeframe.
Add: loss & expense agreed	The total of all loss & expense claims that have been agreed or ascertained by the contract administrator under clause 4.20–4.26. Each Relevant Matter should be separately identified with the agreed amount.
Less: deductions	Any contractual deductions, including liquidated damages (if applicable), rectification costs charged to the contractor, and any other sums properly deductible under the contract.
Agreed final account sum	The original contract sum plus all additions and less all deductions. This is the total sum due to the contractor for carrying out and completing the works under the contract.
Less: amounts paid	The total of all interim payments (including retention releases) made to the contractor during the course of the contract. This should reconcile with the payment records.
Balance due	The difference between the agreed final account sum and the total amounts previously paid. If the agreed final account sum exceeds the amounts paid, the balance is due to the contractor. If the amounts paid exceed the agreed final account sum, the balance is due from the contractor to the employer.
Agreed by	Signed by authorised representatives of both the employer (or contract administrator) and the contractor, confirming agreement to the final account. Include names, positions, and date of agreement.

3. Common Mistakes

Saving all variation negotiations for the final account

One of the most common and damaging practices in the construction industry is the failure to value and agree variations as they arise during the project. When variations are stockpiled and left unagreed until the final account stage, the result is typically a protracted and adversarial negotiation over dozens or hundreds of individual items, many of which are difficult to value retrospectively because records are incomplete, site conditions have changed, and the individuals involved may have moved on. The contract valuation rules (under JCT, clause 5.6–5.10) are designed to be applied contemporaneously. Variations should be valued and agreed progressively, ideally within one interim payment cycle of the instruction being issued. This keeps the financial position transparent, reduces the scope for dispute, and ensures that the final account is substantially agreed by the time practical completion is achieved.

Issuing the Final Certificate before the final account is genuinely agreed

The Final Certificate has conclusive effect under JCT contracts. Once issued, and once the 28-day dispute window has passed, the Final Certificate becomes conclusive evidence that all adjustments to the contract sum have been correctly made and that the quality of materials and workmanship are to the reasonable satisfaction of the contract administrator. If the Final Certificate is issued before the final account is genuinely agreed between the parties, one party may find itself bound by a financial position it did not consent to. The contract administrator should not issue the Final Certificate until the final account has been agreed and signed by both parties. Where agreement cannot be reached, the dispute should be referred to adjudication, arbitration, or litigation before the Final Certificate is issued, so that the disputed items can be determined on their merits.

4. Frequently Asked Questions

What is the conclusive effect of the JCT Final Certificate?▾

Under JCT 2024, the Final Certificate has conclusive effect in two respects. First, it is conclusive evidence that the quality of materials and the standard of workmanship are to the reasonable satisfaction of the contract administrator, where the contract requires them to be so. Second, it is conclusive evidence that all necessary adjustments to the contract sum have been correctly made in accordance with the contract. This means that once the Final Certificate has been issued and the 28-day dispute window has passed without adjudication, arbitration, or legal proceedings being commenced, neither party can challenge the financial position stated in the Final Certificate or raise quality and workmanship issues that should have been identified during the contract. The 28-day window is critical: if either party has a dispute about any matter covered by the conclusive-effect provisions, it must commence proceedings within 28 days of the issue of the Final Certificate. After that, the Final Certificate is binding. This is why it is essential that the final account is genuinely agreed before the Final Certificate is issued, and why both parties should review the Final Certificate carefully and take immediate legal advice if they disagree with any aspect of it.

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