An NEC final account isn't a term in the contract, but it's what most teams call the work that ends in a final payment. The trick is to work backwards from the Defects Certificate, because under NEC4 the formal assessment follows within four weeks and doesn't wait for open issues.
This guide gives the practical steps. For the clause itself, see the final assessment. It's part of our NEC payment and Defined Cost guide.
A plan that works backwards
| When | What to do | Who leads |
|---|---|---|
| Six months before the defects date | List every open compensation event, and start agreeing them in batches | Commercial leads on both sides |
| Three months before | Finish subcontract accounts. Reconcile the retention held at each level | Contractor |
| Two months before | Run a draft of the final assessment with the current figures. Share it | Project Manager |
| One month before | Agree a list of remaining issues, each with an owner and a date | Both |
| At the Defects Certificate | Confirm any uncorrected Defects and their cost effect | Supervisor, Project Manager |
| Within four weeks after | Final assessment and certificate (NEC4 53.1) | Project Manager |
| Within four weeks of that | Any dispute referred, using the steps in 53.3 | Either Party |
The time scale above is a suggestion, not a contract rule. Adjust it for the size of the job. On NEC3, you won't have the 53 deadline, but it's still sensible to set a date in writing.
What needs clearing, by main Option
| Option | The main items |
|---|---|
| A | All activities complete and paid. Implemented compensation events added to the Activity Schedule |
| B | Final remeasure agreed. Quantity differences that may be compensation events resolved |
| C | Final Defined Cost audited and any 50.9 finalised parts confirmed. Final total of the Prices, with the share recalculated |
| D | As C, with a final Bill quantity remeasure for the Total of the Prices |
| E | Final Defined Cost audited, plus the Fee |
On Options C and D, a preliminary share goes into the amount due following Completion, using forecasts. That's clause 54.3 in NEC4. The final account is where it's replaced with a real figure. The pain and gain share guide explains the arithmetic.
Reconciliation layout
Keep the agreed summary to one page. Illustrative figures, fictional Option C contract:
| Line | Final amount |
|---|---|
| Final Defined Cost, audited, after Disallowed Cost | £6,500,000 |
| Fee at 6% | £390,000 |
| Final Price for Work Done to Date | £6,890,000 |
| Final total of the Prices, including all compensation events | £7,090,000 |
| Contractor's share of the £200,000 saving, at an illustrative 50% | £100,000 |
| Delay damages and other deductions | (£10,000) |
| Final amount due | £6,980,000 |
| Paid to date | (£6,960,000) |
| Final payment | £20,000 |
The retention released by this stage is implicit, since no retention appears in the last column once the Option's release point has passed. Check your own retention entries.
A close-out checklist
- No compensation event is left unassessed or unimplemented.
- Every register entry has an outcome, including those rejected.
- Uncorrected Defects have been priced under the correct clause.
- Interest for any late payment has gone through the last assessment.
- Any prior pay less notice is reconciled.
- Insurance receipts and rebates have been deducted on cost Options.
- Subcontract final accounts tie in with the main account.
- Records and retention periods have been checked for each Party.
Where final accounts stall
- Old compensation events. Agree them when memories and staff are still available. A notified event with no reply is a problem to tackle months earlier.
- Key staff leaving. Require a handover note on open items from anyone moving off the job, on both sides.
- Treating it as one big negotiation. Bundled deals can work, but each still needs a record of what it settles. Write down the scope of any settlement, including whether it's final and whether Z clauses affect it.
- Stopping at agreement. Once agreed, the amount still goes through the assessment and certificate. Keep the sequence.
Related guides
- NEC Payment and Defined Cost: The Complete Guide
- Open Book and Cost Records
- Auditing Defined Cost
- Common NEC Payment Mistakes
- Pay Less Notices Under NEC
- The Final Assessment
See how this works in practice
Click through Contract Status with sample contracts: raise the notice, reply to it, and watch both sides of one record.
Take the guided tour Book a demo
Try the commercial role-play, use the free NEC tools or download free NEC templates.
This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.