Schedule of Values: Definition, Benefits, Steps and FAQs
Updated November 7, 2022
A thorough schedule of values form is vital for creating transparency and setting expectations in construction. It's standard practice for commercial contractors to bill clients using this tool. If you're in a project management role, making a detailed schedule can help you easily track how a project progresses and facilitate a favorable payment schedule.
In this article, we define what a schedule of values is, explain the benefits of using it, teach you how to create one and provide answers to common questions about it.
What is a schedule of values?
A schedule of values (SOV) is a list of the work or tasks in a construction project life cycle. It also shows the payment values for each item. This comprehensive document explains each step of a contract in chronological order. Contractors and project managers use them to organize projects, communicate with architects, give information to clients and collect payments.
SOVs often are ideal for project managers or contractors who work on large-scale commercial projects with many components. Contractors or project managers who lead these projects use a schedule of values to monitor the budget, payment application management and cost tracking. Smaller projects with an approved budget, fixed price and guaranteed maximum price contract also may benefit from an SOV. These kinds of contracts set the total project cost in advance, and an SOV's in-progress cost breakdown can help ensure the project doesn't go over the budget.
Benefits of using a schedule of values
Here are some benefits of using a schedule of values for a construction job:
Creates and maintains order
A schedule of values creates a visual timeline for a client, team member, foreperson or designer. Remodeling someone's home, developing a new structure or designing and adding to a commercial building takes a lot of planning and coordinating. Completing some parts of a job is necessary before starting others, and doing these things in a specific order can save money. In this way, the SOV serves as a reference sheet and can help you organize and focus your tasks.
Increases accountability and trust
As a project manager, being accountable means being responsible for your work and sticking to commitments. A schedule of values describes the proper order of job completion and details how much everything costs. Providing this document to clients sets goals and creates a timeline for you to follow. Adhering to each step of the itemized list, being on time and staying within the price estimates can help build trust between you and the client. Developing accountability and trust can be crucial to creating long-lasting client relationships and getting new referrals.
Sets clear expectations for team members
Communicating your expectations can help inform every team member what they're responsible for in a project. Sharing the schedule of values with everyone on the construction site can help people to understand their individual goals and responsibilities. It outlines a timeline of events and it helps each person stay on track to meet their expectations. You can also use an SOV as a reference sheet for giving constructive feedback.
Makes collecting payments easier
A multi-step construction job usually involves a multi-step client payment plan. As a project manager, ensuring the client agrees to the schedule of values in advance makes collecting those payments easier. This document lists the cost and values for each component of the job. It also specifies the estimated dates of service and client payment dates. When a commercial business or residential homeowner has advanced notice of when bills are due, they're more likely to pay them on time.
How to structure a schedule of values
A well-constructed SOV is easy to interpret and includes all the information the client may want. Here are the steps you can follow to create a schedule of values:
1. Include a heading and basic information section
This section appears at the top of your document. Here's a list of things to include when designing your heading and basic information section:
Name of contractor
Name of liaison or contact person
Name of client
Client billing address
Client service address
Name of architect
Architect application date
Architect Application number
2. Add a project spreadsheet
This section directly follows the heading and basic information. Your spreadsheet is where you itemize each part of the job, outline the timeline and estimate costs. This table often uses columns and rows to make it easier to read and interpret. Here's the information you can include when creating a thorough project spreadsheet:
Rows run horizontally across a spreadsheet. Here are the things that you can represent in rows on your spreadsheet:
Description of work item
Estimated cost or scheduled value
Retainer or deposit
Final balance due
Columns are vertical and intersect with the rows across a spreadsheet. The items represented in each column correspond to the title of each row. For example, if the construction job you're planning has seven itemized components, then you can include seven unique item serial numbers in each cell within that column. In addition, try to make sure there are seven dollar amounts listed in the cells below the row representing the scheduled value.
3. Include a consent and acknowledgment
Consent and acknowledgment is the last section of your schedule of values form. This includes spaces for the client, the architect and the contractor to print and sign their names. It also includes a space for each party to write the date of their acknowledgment. You can get signatures in person or use a secure e-signature platform.
Frequently asked questions about a schedule of values
Here are some common questions about designing, editing and using a schedule of values for contracting jobs:
Can I use a schedule of values for GMP contracts?
You can use a schedule of values form for contracts with a guaranteed maximum price (GMP.) A thorough schedule of values is a valuable management tool that can create order, encourage accountability and increase client trust. Using this form offers transparency and can apply to jobs with a fixed price or a guaranteed maximum price.
Can I change the price for items if I am using a schedule of values computer software program?
You can change the price for individual items. For auditing purposes, most software programs require an approved budget transfer process to make this type of change. After approving the budget, you can set a new standard price in the program for all of your future invoices.
When can I give the client the schedule of values?
You can give the client a copy of the schedule of values as soon as you get approval from an architect. You can present it to the client at the same time as the contract. Try to make sure the client reviews and signs these items before you start any work to avoid misunderstandings.
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