Managing Construction Claims

Construction claims are the claims raised by the enterprise for payment by the client. Claims are usually invoiced at intervals during the construction stage of the work flow. A progress claim template can be applied that reflect the amounts applicable at each claim stage.

Manual entry of claims is supported, as is a batching process.

Benefits Of Managing Construction Claims

Contract Value And Applying A Template

Prior to selecting the required template, the contract amount must have been entered into the Building Contract Document screen. This allows for the contract value to be split based on the percentages stipulated for each stage in the building contract.

Once the template is applied, each stage is recorded as an item, with a dialog available to record information about the claim, such as:

• Invoice number
• Invoice value
• Raised date
• Sent date
• Date due
• Date paid
• Accounts reference
• Notes

Some of this information is automatically captured based on values previously entered, preferences set, and the structure of the template.

Raising Claims

Framework ECM creates the raised date for a construction claim when a trigger date has been entered, usually via the Construction Overview screen.

Other information is entered directly for each of the claims, if necessary, for invoice number, date sent to client, or paid by the client.

Batch Claims

Batch claims is used to process numerous progress claims in one action. Using filters and other options, batch claims created by Framework ECM will better manage the way in which claims are produced, allowing many claims to be printed at one time. Batch claims can be run on a weekly or monthly basis, ensuring that progress claims do not get overlooked.

Framework Claims Integration

Framework Integration provides a safe and structured process for transferring data between Framework ECM and other third party systems. Integration is available for many products and many different types of data including invoicing and receipts integration.

For further information on claims integration, see the Framework Integration User Guide.

Forecasting Claims

Forecast claims is a separate function of Framework ECM to the construction claims process. Forecasting is a process allowing revenue forecasting without impacting on the actual construction claims.

Payments

When not using claims integration, users have the ability to enter receipts into Framework ECM and link them to invoices on the Construction Claims screen.

What To Do

Requirements

Setting Preferences

There are preferences that can be set and consideration has to be given to the choices prior to commencing the claims process.

Examples of preference options includes:

• Create Claims for Zero Value Variations: Yes or No
• Raise Claim on Forecast Date: Yes or No
• Claims Rounding Methods: Standard, Nearest 5 cents, or No Rounding
• Claim Receipts: Restricted or Controlled by Deposits

Creating The Template To Match The Contract

In order for the construction claims template to represent the actual dollar amounts due at each stage of construction, the template must reflect the stage percentages as set out in the building contract.

Framework ECM’s standard template is based on the standard HIA contract:

This template can be altered or new ones created to suit the specific breakdown being used in the building contract.

Entering The Contract Value

Before applying a progress claims template, the building contract amount must be entered into Framework ECM. The value of each claim is dependant on applying the stage percentage to the contract value.

If applicable, the building contract signed date will trigger the raised date for the contract deposit.  This can be done on the Building Contract Document screen.

Variations

Any final variation documents created will create an additional claim. By default these will be claimed upon completion, however, there is the ability to raise the invoice at an earlier stage by changing the work flow stage within the claim. If the document status is changed from final, the claim will be removed from the claims screen. There is a preference in the system to not raise a claim stage on the claims screen for variation documents with a total value of zero

Reversing A Claim

To reverse a claim, remove the work flow date from the Construction Overview screen, edit the claim in question and toggle to remove the raised date. It is important to note that ifFramework Integration for claims is being used, then reversal of claims should not be done if the invoice has been integrated into your accounts system.

Deleting A Claim

This function should only be performed if a claims template needs to be reapplied to the job. Once an invoiced claim has been integrated into your accounts system, the template cannot be deleted.

Planning

Processing Procedure

The raising of construction claims can represent the revenue of the business, so a thorough procedure needs to be in place to ensure timeliness and accuracy.

Claims are raised in three ways:

1. Entering the complete date on the Construction Overview screen.
2. Entering a complete date on a claim activity in the logistics programme.
3. Entering an invoice date and invoice number against a claim on the Construction Claims screen.

Determine the frequency of raising and invoicing of claims and the authorisation process.

Reporting

Framework ECM includes a number of standard reports that are used for managing and invoicing construction claims.

Invoices can be printed directly from the Construction Claims screen. When a claim has been raised and an invoice is ready to be sent to the client, one of the standard invoice reports may be printed.

Note: It is possible to have reports tailored specifically to suit a business. For more information, contact Insula Software.

Implementation

• Set the preferences
• Plan the process
• Client focused reporting (invoice/letters)
• Educate staff

Ongoing Management

• Process to continue to include strict control of claim dates via authorisation by the appropriate personnel.
• Ensure process continues to match contractual obligations.
• Ensure staff training is maintained and consistent.
• Analyse reports to determine that the process is being followed and is still relevant to the business.

Frequently Asked Questions

Question: I've raised a claim but I need to undo it, because it's not ready.

Answer: Once the forecast/actual date (depending on preference setting) has been removed from the Construction Overview or the Data Entry screen, edit the claim and toggle the Raised by Stage? field. This forces the claim to refresh the raised date. If the raised date of the claim is blank, the claim is no longer raised.