What is a Schedule of Values?

Описание: 1:131:13What are the best practices for your Schedule of Values? How can you make sure your cash flow is healthy? Read more (https://www.levelset.com/blog/what-is...) and download a FREE template here: https://www.levelset.com/blog/what-is....

00:00 - Intro
00:08 - What is a Schedule of Values?
00:27 - What is a Schedule of Values for?
01:13 - Can I frontload my Schedule of Values to improve my cash flow?

#ScheduleOfValues #SOV #Construction

-What is a Schedule of Values? (0:08)
A schedule of values, or SOV for short, is a start-to-finish list of work items on a project and their associated costs. All these work items and their corresponding values represent the entire project from beginning to end - as well as the entire contract price.

-What is a Schedule of Values for? (0:27)
Practically, a Schedule of Values is used as a management tool in monthly pay application processing. It’s a good indicator of how the job is progressing and helps with tracking expected costs versus actual costs.
On some projects, the Schedule of Values might be very detailed - different aspects of work may be divided into small portions and priced according to each specific piece of work. On other jobs, the Schedule of Values may be less specific and might group similar or related job functions and price the value of that work accordingly. Unfortunately, there’s no uniform, industry-wide way to do it.

-Can I frontload my Schedule of Values to improve my cash flow? (1:13)
Because the Schedule of Values is closely tied to cash flow, it can be tempting to frontload the Schedule of Values by increasing the value of the early project activities and de-valuing work at the end. That way, there’d be more cash on hand from the jump.
This a bad idea for many reasons. One practical reason is that the owner or architect must sign off on the schedule of values and typically look to avoid this exact behavior. It won’t look good if you’re caught trying to fudge the numbers for your own benefit! Further, if a payment issue arises, it might be difficult to explain why payment applications don’t line up with when payments are being released to others down the payment chain.
There are a slew of other potential issues that can arise from failing to prepare the SOV correctly and accurately.

Levelset’s mission is to empower contractors to always get what they earn. Levelset’s products help millions in the construction industry each year to make payment paperwork and compliance easier, get cash faster, monitor the risk on jobs and contractors, and better understand payment processes and rules. The results are faster payments, access to capital, and fewer surprises. Backed by investors like Horizons Ventures, S3 Ventures, Altos Ventures, Operating Venture Capital, and Brick & Mortar Ventures, Levelset is headquartered in New Orleans, Louisiana, with offices in Austin, Texas, and Cairo, Egypt, and is over 200 employees strong. Learn more at www.levelset.com.

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