Handover & Completion · Mandatory · Completion

Final Account Summary

A summary of the final agreed contract value including all variations, dayworks, claims, and adjustments.

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

Legal basis	JCT/NEC Contract Terms + Housing Grants, Construction and Regeneration Act 1996
Status	Mandatory
Prepared by	Quantity Surveyor / Contractor
JCT Final Certificate	The Final Certificate has conclusive effect — it is deemed to be conclusive evidence that the works are in accordance with the contract unless proceedings are commenced within 28 days
Timing	Start the final account process at practical completion, not after the defects liability period ends

1. The Final Account — Bringing All Financial Matters to a Close

The final account is the process of reconciling the original contract sum with all adjustments that have occurred during the course of the project to arrive at the agreed total payment due to the contractor. It is the definitive financial settlement of the construction contract. Every variation, provisional sum adjustment, daywork, fluctuation, loss and expense claim, and deduction must be valued, agreed, and incorporated into a single final account sum.

Under the JCT Standard Building Contract, the Final Certificate has conclusive effect. Once issued, it is deemed to be conclusive evidence that the quality of materials and the standard of workmanship are to the reasonable satisfaction of the architect, that any necessary adjustments to the contract sum have been correctly made, and that all extensions of time due have been given. This conclusive effect takes hold unless arbitration or legal proceedings are commenced within 28 days of the Final Certificate being issued. The consequences are significant — after the 28-day window closes, neither party can challenge the financial settlement or the quality of the works, except in cases of fraud.

The final account process should begin at practical completion, not after the defects liability period has ended. Waiting until the end of the DLP to begin reconciling the account prolongs uncertainty for both parties, increases the risk of disputes, and makes it harder to resolve disagreements because records and recollections become less reliable over time. A well-managed final account should be substantially agreed before the Final Certificate is due.

Start at practical completion

Start the final account process at practical completion, not after the DLP ends — waiting prolongs uncertainty and disputes. The contractor should submit their final account within the timescales required by the contract, and the quantity surveyor should begin valuation immediately. Delays in the final account process benefit neither party.

2. Final Account Components

The following table sets out the key components that make up the final account. Each element must be valued and agreed between the parties before the final account can be concluded.

Component	Description
Original contract sum	The agreed lump sum or contract price stated in the contract documents at the time of execution. This is the starting point for the final account calculation.
Variations	All architect's instructions and variations issued during the contract must be valued in accordance with the valuation rules in the contract (e.g. JCT clause 5.6–5.10). This includes additions, omissions, and substitutions.
Provisional sums	Provisional sums included in the contract for work not fully defined at tender stage must be replaced with the actual cost of the work as instructed and carried out. Both defined and undefined provisional sums must be reconciled.
Daywork	Work carried out on a daywork basis where measurement and valuation of a variation using contract rates is not appropriate. Daywork sheets must have been submitted and verified contemporaneously.
Fluctuations	Where the contract provides for fluctuations (price adjustment for changes in labour, materials, or statutory costs), the fluctuation calculation must be carried out and agreed. Many contracts are now fixed-price, but where fluctuations apply they can be significant.
Loss and expense	Claims for direct loss and/or expense caused by matters for which the employer is responsible under the contract (e.g. late information, failure to give access). These must be substantiated with records and evidence.
Deductions	All deductions the employer is entitled to make, including liquidated damages for late completion, costs of rectifying defects not remedied by the contractor, and any set-off amounts properly notified.
Agreed final account sum	The total arrived at after all additions and deductions have been applied to the original contract sum. This is the definitive sum payable under the contract.
Payments to date	The total of all interim payments (including the release of the first half of retention at practical completion) made to the contractor during the course of the project.
Balance due	The difference between the agreed final account sum and the total payments made to date. This is the amount payable with the Final Certificate, including the release of the second half of retention.
Retention release	The second half of retention is released with the Final Certificate upon the expiry of the rectification period (DLP) and the making good of all notified defects.
Agreement	Both parties should sign the final account statement confirming that the agreed sum represents the full and final settlement of all financial matters under the contract. This prevents future claims.

3. Common Mistakes

Delaying the final account process

One of the most common failures is leaving the final account until after the defects liability period has ended. By that point, the project team has often moved on to other projects, records are harder to locate, and the contractor's motivation to co-operate is reduced. The final account process should begin at practical completion. The contractor should submit their account promptly, and the quantity surveyor should begin valuation immediately. Delay introduces uncertainty, increases the risk of disputes, and prevents both parties from closing out their financial commitments.

Not valuing variations promptly

Variations should be valued as they arise, not left to the end of the project. When variations are not valued until the final account stage, there is an accumulation of unresolved items that creates a significant financial gap between the parties. Contemporaneous valuation allows disagreements to be identified and resolved while the work is fresh and records are available. Leaving all variations to the final account stage almost guarantees a protracted and adversarial settlement process.

Treating the Final Certificate as routine

The JCT Final Certificate has conclusive effect. Once the 28-day dispute window has passed, neither party can challenge the financial settlement or the quality of the works (except for fraud). Treating the Final Certificate as a routine administrative document is a serious error. The employer must review the final account thoroughly before the Final Certificate is issued and must be satisfied that all adjustments are correct. If there are unresolved disputes, they must be referred to adjudication, arbitration, or litigation within the 28-day window or the right to challenge is lost.

Not serving a pay-less notice

Under the Housing Grants, Construction and Regeneration Act 1996 (as amended), if the employer intends to pay less than the notified sum, a pay-less notice must be served within the prescribed period. Failure to serve a valid pay-less notice means the employer must pay the full notified sum, even if the employer disputes the amount. This is a common and costly mistake at final account stage, particularly where the contractor's final account submission exceeds the employer's valuation.

Not documenting the settlement basis

When the final account is agreed, the basis of the settlement should be clearly documented in a signed final account statement. This should record the original contract sum, each adjustment, the agreed final sum, and a confirmation that the settlement is full and final. Without a signed statement, disputes can re-emerge after the final account was thought to be agreed. Verbal agreements or informal email confirmations are insufficient for a binding settlement.

4. Frequently Asked Questions

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

Under the JCT Standard Building Contract, the Final Certificate has conclusive effect once 28 days have passed from its issue without either party commencing adjudication, arbitration, or legal proceedings. After that 28-day window, the Final Certificate is deemed to be conclusive evidence that the quality of materials and standard of workmanship are to the reasonable satisfaction of the architect, that all necessary adjustments to the contract sum have been correctly made, and that all extensions of time due have been given. This means that neither party can subsequently challenge the financial settlement or the standard of the works, except in cases of fraud. Both parties must therefore review the final account thoroughly before the Final Certificate is issued.

How does the final account process differ under NEC4?▾

Under NEC4, the final account process is managed through the assessment of the defined cost and the schedule of cost components, rather than through adjustments to a contract sum. The project manager makes a final assessment of the amount due, and the payment provisions of the contract apply in the usual way. There is no equivalent of the JCT Final Certificate with conclusive effect. Instead, disputes under NEC4 are referred to the adjudicator or tribunal as they arise. The NEC4 approach is more transparent because costs are assessed on an open-book basis throughout the project, but it requires robust record-keeping and regular cost reporting from the contractor.

Is there a deadline for the contractor to submit the final account?▾

Under JCT contracts, the contractor is required to submit all documents necessary for the adjustment of the contract sum within six months of practical completion (or such other period as stated in the contract particulars). If the contractor fails to submit within this period, the quantity surveyor may proceed to prepare the final account based on the information available. Under NEC4, there is no single final account submission — the project manager makes a final assessment based on the records maintained throughout the project. Regardless of the contractual mechanism, the contractor should submit their account as promptly as possible to avoid delay in settlement.

How does the final account work under JCT Design & Build?▾

Under the JCT Design and Build Contract, the contractor submits a final statement and a final account within the period stated in the contract particulars after practical completion. The employer then has a specified period to issue a final statement in response. If the employer does not respond within the prescribed period, the contractor's final statement is deemed to have been accepted. The Final Certificate under JCT D&B has the same conclusive effect as under the Standard Building Contract — once the 28-day dispute window has passed, neither party can challenge the settlement. The D&B final account includes all adjustments for change instructions, loss and expense, and any other financial matters arising under the contract.

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