Picture yourself overseeing the construction of a new hospital wing—a $5 million project spanning 18 months with multiple subcontractors, intricate medical systems, and stringent regulatory requirements.
As you take on this complex construction project, you know it needs comprehensive documentation to keep track of all the work that needs to be done. This includes labor, expenses, inventory, permits, and every other detail involved in this multimillion-dollar project, spanning multiple contractors and hundreds of tasks.
That’s where a schedule of values (SOVs) comes into the picture.
In this blog, we will explore the concept of a schedule of values, why it’s important for project managers in construction projects, when to use it, and the benefits of creating one.
How to Create an Effective Schedule of Values for Projects
- What Is a Schedule of Values?
- When to Use a Construction Schedule of Values
- Use Case 1: Large-scale commercial projects with complex phases and multiple subcontractors
- Use Case 2: Projects where close monitoring of cash flow and project progress is essential
- Use Case 3: Projects with progress billing or milestone-based payments
- Use Case 4: Construction jobs where project owners or lenders require detailed cost breakdowns
- Key Components of a Schedule of Values
- Creating a Schedule of Values
- Benefits of Creating a Schedule of Values
Summarize this article for me pleaseWhat Is a Schedule of Values?
A schedule of values is a comprehensive document that breaks down the total contract value of a construction project into smaller, manageable line items to indicate which item or task in the project costs how much.
It is used by contractors, project managers, and construction managers to track and manage the finances and number of tasks required to complete a construction project.
Each line item in the schedule of values represents a specific component of the project, such as site preparation, foundation work, or electrical installations, along with its associated cost. This detailed cost breakdown is a key reference point for a project owner throughout the duration of the project.
For example, for a residential project, the schedule of values might look something like this:
Importance of a schedule of values
The schedule of values plays an important role in construction project management because:
- A schedule of values helps to predict and manage cash flow throughout the project’s life cycle. By breaking down costs, project managers can anticipate expenses and plan finances accordingly to ensure a consistent cash flow
- It allows a project manager to closely monitor project progress. As work is completed, it’s easy to compare actual progress against the scheduled value for each line item
- The schedule of values helps in having a smoother payment process. Progress payments are typically based on the percentage of work completed for each line item, making it easier to prepare and verify payment applications
- By providing a detailed breakdown of project costs, the schedule of values helps in better cost control and identifying any deviations from the project budget early on. This helps everyone to stay on track and avoid going over budget or over time
Summarize this article for me pleaseWhen to Use a Construction Schedule of Values
While a schedule of values is beneficial for most projects in the construction industry, it’s particularly crucial for:
Use Case 1: Large-scale commercial projects with complex phases and multiple subcontractors
These projects might involve intricate workflows and numerous interdependencies. A schedule of values helps manage the complexity by breaking down the project into manageable components.
It also facilitates better subcontractor coordination, ensuring that each party’s work and associated costs are clearly defined and tracked.
Use Case 2: Projects where close monitoring of cash flow and project progress is essential
For projects with tight budgets or stringent timelines, a schedule of values becomes an invaluable tool for a project manager.
It allows for real-time tracking of expenses against budgeted amounts, helping identify potential cost overruns early. Additionally, it promotes accurate progress reporting, allowing construction managers to calculate the earned value of a project.
Use Case 3: Projects with progress billing or milestone-based payments
In these types of payment structures, the schedule of values serves as the foundation for determining payment amounts. It allows you to calculate completed work percentages accurately.
This approach helps maintain a healthy contractor cash flow by ensuring fair and timely payments. It also gives the project owner a clear understanding of how their funds are allocated throughout the project’s life cycle.
Use Case 4: Construction jobs where project owners or lenders require detailed cost breakdowns
Some project owners or financial institutions mandate the use of a schedule of values for transparency and risk management.
It gives them a comprehensive view of project costs, helping them assess financial risks, make informed decisions, and ensure that funds are being used as intended.
Note: Even for smaller projects, a simplified schedule of values can help provide valuable insights, improve project management, and act as a record to predict finances and time taken for similar projects in the future.
Summarize this article for me pleaseKey Components of a Schedule of Values
A well-structured schedule of values typically includes the following list of things:
- Business information: Name of the contractor, company, business address, contract numbers, project name, etc.
- Line items: Detailed breakdown of all project elements
- Description: Clear explanation of the project and each line item
- Scheduled value: The allocated budget in total and for each item
- Previous applications: Amount billed in the last payment cycle
- Current application: Amount being billed in the current cycle
- Materials stored: Value of materials stored but not yet installed
- Total completed and stored: Sum of work completed and materials stored for future use
- Percentage completed: Percentage of work finished
- Balance to finish: Total remaining amount to be billed later
Summarize this article for me pleaseCreating a Schedule of Values
Building an SOV is not rocket science. It may take some time and practice to perfect it, but once you get the hang of it, you can remember everything like the back of your hand.
A well-made SOV will be easy to read and understand. It must include all the steps of the project, its finances, and other proofs, and should be accessible by all the parties involved for true transparency.
But what happens once you begin your project? How can you ensure you and your team stay on track, know what to do and when, and stick to the deadline?
Enter a solid construction project management software like ClickUp!
The best way to keep track of an ongoing construction project is by using project software. While ClickUp is well-known for its project management features, it also functions as an effective tool for creating your schedule of values. Let’s explore how.
ClickUp’s Construction Project Management Software platform can help you simplify your workflows, improve collaboration, and deliver projects on time and within budget.
Let’s walk through the steps of building a well-rounded schedule of values and how ClickUp can help:
Step 1: Review all project documents
Start by thoroughly examining the project scope, construction schedule, permits, and contract documents to see if everything is in place before the project begins.
This will help you identify all major components of the project and prepare them before you start working on them.
ClickUp Docs can help you with project documentation to store all information, permits, contracts, and bills in one place. You can even create a Schedule of Values document and store it easily.
Step 2: Break down the project
Divide the entire project into logical and manageable sections. Each section should represent significant work or a key project phase.
For instance, you can have different steps for gathering raw materials, site preparation and landscaping, adding foundation and walls, brick and stone masonry, metalwork, woodwork, thermal installation, doors, windows, and hardware, and so on.
Then, break them down further to incorporate each component into as much detail as you can. Larger projects may require more granular breakdowns, while smaller projects might use broader categories.
ClickUp Tasks can help you break down your project into smaller tasks and subtasks that are easier to track, follow, assess, and complete.
Once you have created your schedule of values and broken down every step of the construction project, simply add all components and tasks to the ClickUp platform and assign them to the designated person.
Additionally, ClickUp also provides free-to-use templates for construction efficiency.
ClickUp Construction Project Management Template
ClickUp’s Construction Project Management Template is an advanced-level template to help construction managers organize and plan all product stages and phases. Whether it’s a new building or a renovation project, stay on top of every step till completion.
This template helps you:
- Schedule recurring weekly or monthly tasks easily all at once
- Eliminate any manual calculations and reporting to save time for actual construction tasks
- Stay on top of the project budget and resources to manage your costs and inventory efficiently
Step 3: Assign costs or values
After breaking down the project into smaller steps, allocate costs to each line item based on subcontractor bids, material costs, labor estimates, and other necessary factors. Ensure that the sum of all line items equals the total contract price.
ClickUp Dashboards allow you to personalize your project dashboard according to your liking. Visualize the project’s progress, financials, deadlines, and bottlenecks all at a glance.
Your customized dashboard allows you to view all your construction projects, their status, tasks completed, tasks remaining, and more.
Connect your finance and accounting teams directly on the platform to keep everyone on the same page. ClickUp Finance notifies you when payments are due and allows you to add recurring tasks on your dashboard for repeating bills.
After paying a monthly bill, you can mark the task complete. A new task will be automatically created for the next month if it’s a recurring task. You can even integrate with finance and bookkeeping tools on ClickUp to seamlessly connect the different stakeholders of a project.
ClickUp Finance Management Template
Additionally, you can also use ClickUp’s Finance Management Template, an intermediate-level template for integrated project accounting. It is your all-in-one financial help to keep track of your quotes, invoices, products, services, tasks, and any other offerings you may have.
With this template, you can:
- Closely monitor your budget and expenses so that you don’t go over your project limit
- Identify places where you can save money
- Analyze financial performance with visual analytics tools once your project is over to plan for future projects
- Take data-backed decisions with improved visibility into your finances
Also Read: 10 Best AI Tools for Accounting & Finance
Step 4: Align with project schedule
Ensure that the schedule of values aligns with the project timeline and schedule. This alignment will help you track your project’s progress accurately.
ClickUp Custom Fields can be created to manage the moving parts of a project. Every project is unique, so why should your project management software offer the same flat dashboard?
Add client contact information, vendors, partners, house type, project phase, and deadlines, and customize dropdown menus with Custom Fields to accommodate each project’s unique needs.
Step 5: Review and adjust
Review the schedule of values with key stakeholders, including the project owner and general contractor, and see if you missed anything. Make adjustments as necessary to ensure that all parties are on the same page.
Based on the collected information, generate detailed reports of your project summary, finances, and progress. No need for manually calculating reports or separate construction reporting software. You can also share automated reports with key stakeholders in minutes while you focus on completing your project on time.
Also Read: 10 Free Construction Budget Templates to Use
Summarize this article for me pleaseBenefits of Creating a Schedule of Values
The schedule of values is an important document for construction project management. It can serve as the single source of truth for all the parties involved in a construction project.
It helps build a more trusting relationship between the contractor and the client since every task, cost, and inventory has been recorded and approved from day zero.
Apart from this, here are the key benefits of having an SOV for all your construction projects.
- Improved cash flow management: Breaks down the project into smaller, billable tasks and components so that contractors can maintain a healthier cash flow throughout the project’s duration, reducing financial strain
- Enhanced progress tracking: Serves as a roadmap for project managers to track the progress of each area of the project accurately and identify any potential delays or issues early on
- Streamlined payment process: Makes the payment application process more straightforward and less prone to disputes with a clear breakdown of completed work and stored materials
- Better cost control: Helps visualize actual costs against the scheduled values to quickly identify and address any cost overruns or unexpected expenses beforehand
- Improved communication: Becomes a common reference point for all project stakeholders, facilitating clearer communication about project status, costs, and progress
Summarize this article for me pleaseBuild Your Schedule of Values with ClickUp
The schedule of values is an important document for project managers, financial controllers, and owners who oversee construction projects of any kind.
The schedule of values ensures that all projects stay on track financially and temporally by providing a detailed cost breakdown, accurate progress tracking, and streamlining the payment process.
Whether you’re handling large-scale commercial projects or smaller construction jobs, mastering the use of a schedule of values will elevate your project management skills and contribute significantly to your project’s success.
And what can make it even better? Use the right project management software, such as ClickUp, to enhance your project monitoring capabilities, automate repetitive tasks, maintain consistent cash flow, and ultimately deliver successful construction projects.
Sign up to ClickUp for a free trial today!
Everything you need to stay organized and get work done.
