It moved because somebody closed a quarter
The cost report shows a sharp movement in one package. Nothing happened on site that month — the same crews, the same progress, no variations of any size.
The explanation, when it eventually arrives, is that the contractor's financial year ended and a batch of accruals was recognised that had been sitting unposted for two months.
Nothing improper occurred. A company closed its books to its own calendar, as it is required to do. What moved was your figure, for a reason that has nothing to do with your project and can't be found anywhere in your records.
The basis you can't ask about
Reporting Week 14 dealt with commitments, accruals and invoices arriving from the commercial team. The advice there rested on something quiet: when an accrual looked odd, you could go and ask how it was built.
Across companies that route is closed. What arrives is a figure in a report, and the working underneath it is internal to a business that has no obligation to explain its accounting to a customer.
So an accrual that seems high can't be interrogated the way Cost & Cash Week 10 assumes. It can be compared against progress, against invoices and against what the site says was done — the corroboration from Reporting Week 8 applies directly — but it can't be traced.
Their calendar isn't a project calendar
The second difference produces the movement in the opening.
A company's reporting periods exist for its own purposes: statutory accounts, group consolidation, tax. Those dates were set before your project started and will outlast it, and they are not going to move for your monthly report.
Around them, judgement is exercised. What gets recognised in one period rather than the next is an accounting decision, taken for reasons internal to that business, entirely legitimately. The effect on your cost report is a side effect nobody intended and nobody will explain.
Which makes it a different problem from the two cut-off dates in Reporting Week 16. There, two dates were misaligned and reconciling them was administrative. Here the misalignment is deliberate on the other side and isn't available for negotiation.
A chart of accounts you are borrowing
The third difference is structural and it degrades slowly.
Another company records cost against their own code structure, built for their business. What you receive has been mapped to yours by somebody, once, probably at the start, and that mapping is a translation with losses in it.
It is also unmaintained. New codes appear on their side as the work develops. Where they don't map cleanly, the cost lands in whatever bucket is closest, and after a year the closest bucket contains a category of spend nobody named.
Cost & Cash Week 6 built the code of accounts as the spine of cost control; here you are using somebody else's spine through an adapter.
When their cost is your cost
On a reimbursable or target-cost arrangement the position sharpens considerably.
Their ledger isn't an input to your report — it is the thing being paid. Every judgement about what is chargeable, how overhead is allocated and when something is recognised comes straight through to the outturn, and on a target cost it comes through to the share.
Contracts on that basis carry audit rights, and they are the answer. But exercising them is a commercial act with a cost of its own: it is read as an accusation, it consumes weeks, and it changes the relationship. Which is why the moment they are finally exercised tends to be the moment the relationship has already gone, and the records are two years old.
The alternative is to agree the basis at the start, in writing, at a level of detail that feels excessive at the time — what is chargeable, what rate, what overhead treatment, what evidence accompanies each claim. That conversation is cheap before the first invoice and impossible after the fiftieth.
What to publish
One habit makes the whole of this manageable, and it is a reporting decision rather than an accounting one.
Keep their number and your restatement of their number as separate lines. What they reported, and what you are carrying after adjusting for period differences, mapping and known lags.
That looks like duplication and it is the only way the report survives a question. When somebody asks why the figure moved, the answer is visible on the page: their number moved for their reasons, your carried figure didn't, and the difference is stated. Publishing one blended number means the movement has to be explained from memory every time.
System design
The third and fourth rows are one idea: never let their figure and your figure become the same line.
| Record | Produced by | Required quality | Verified against | Feeds |
|---|---|---|---|---|
| Financial year end per party | Project controls | Marked on the reporting calendar, all parties | Public filings or one question | Expected movement in cost |
| Code mapping | Project controls with commercial | Reviewed on a date, not built once and left | Their reported codes | Cost report · forecast |
| Their reported figure | The other company | As received, unadjusted | Their submission | The audit trail |
| Your carried figure | Project controls | Adjusted for period, mapping and known lag, with the adjustment shown | Progress and invoices | Cost report · outturn |
| Reimbursable basis | Contracts, at award | What is chargeable, at what rate, with what evidence | The contract | Every invoice thereafter |
Keeping both looks like duplication until the first month somebody asks why the cost jumped. With two lines the answer is on the page; with one it has to be reconstructed by whoever happens to remember.
Practical insight
Find out the financial year end of every company sending you cost, which is public information for most of them and a single question for the rest.
Mark those dates on your own reporting calendar. In the months around them you will see movement in your cost report that has no site cause, and you will know in advance which package it will come from.
Then take one large accrual you received last month and try to corroborate it — against progress, against what the site says was done, against invoices you have actually received. You won't be able to trace it, and that is expected. What you will find out is whether it is plausible, which is the only test available to you and a great deal better than accepting it because it arrived in a report.
Key takeaways
- A cost figure can move sharply with nothing happening on site, because another company closed its books.
- Across companies an accrual can't be traced. It can only be corroborated against progress, site records and invoices.
- Their reporting periods exist for statutory and group purposes and won't move for your monthly report.
- Recognition judgements are legitimate and internal, and the effect on your report is a side effect nobody will explain.
- The chart of accounts you receive is a mapping from theirs, made once and rarely maintained.
- Unmapped codes land in the nearest bucket, which after a year holds a category of spend nobody named.
- On reimbursable and target-cost work their ledger is the thing being paid, and audit rights are the answer.
- Publish their number and your restatement as separate lines. A blended figure has to be explained from memory.
Records born here. Each party’s financial year end on the reporting calendar · the code mapping and its review date · their reported figure and your carried figure, side by side.
What is coming next
Cost and progress both arrive as numbers. The last thing that crosses an organisational boundary is a document, and it has to reach a person holding a drawing on a wall.
Next week: document control across six firms — distribution rather than transmittals.
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