Case Study: Restoring Payment Certainty and Cash Flow to Fire Safety Remediation Schemes
A fast-paced fire safety remediation programme is commercially volatile. On several simultaneous and fast-paced schemes, a principal contractor found themselves facing highly inconsistent cash flow. Visibility over project profitability had completely vanished.
The problems were deeply embedded in daily operations. Interim applications for payment were frequently submitted late. They lacked the granular detail required to support a full valuation. Worse still, the contractor failed to capture the growing value of instructed and emerging variations. Internally, senior management had no clear reconciliation between cost, value, and their forecast position. They were operating entirely in the dark, uncertain of the true margin available for wider business use.
IMH Consult was appointed to restructure the external application process and rebuild the contractor's internal commercial reporting.
Restructuring the External Valuation Process
We introduced a disciplined monthly cycle to stop the financial drift. First, we implemented a structured and thorough process to ensure all interim applications were submitted on time. Every application complied fully with the specific contract terms. We backed each submission with clear measurement, supporting records, and detailed narrative justifications. This immediately improved the assessment confidence of the employer’s team.
Next, we stopped the profit leakage. We ensured that every instructed variation was accurately valued and included within the applications. We also built in well-evidenced estimates for pending and potential changes. This updated the contractor’s entitlement position and protected their margins from decay.
Implementing Internal Cost Value Reconciliation (CVR)
You cannot fix external valuations if your internal figures are broken. We established a transparent internal CVR process. This process aligned actual costs incurred, committed costs, earned value from applications, and the forecast final position. It allowed the business to identify financial trends early. It ensured all reported margins were realistic and defensible.
Alongside the CVR, we built a rolling forecast of the final contract value. This dynamic model incorporated agreed variations, anticipated changes, and critical prolongation loss and expense claims. This forward-looking approach allowed senior management to make proactive decisions instead of reacting to historical data.
By linking the external valuation process directly with internal cost control, the contractor gained absolute margin visibility. They finally understood exactly how much cash could safely be drawn for wider business use without risking project performance.
The Tangible Results
Our consistent implementation transformed the quality and reliability of the project’s financial reporting. The engagement delivered immediate commercial benefits:
Certified values increased significantly through well-substantiated interim applications.
Cash flow improved and payment disputes dropped.
The business gained an accurate, real-time understanding of project profitability.
Senior management regained full commercial control and decision-making confidence.
