Schedule of Values - An Overview

The Schedule of Values (SOV) is an itemized list of all billable work items, systematically aligned with the project's Work Breakdown Structure (WBS). It serves as a detailed roadmap for tracking and managing the periodical payments, ensuring transparency and accountability throughout the project lifecycle. 

• Each item is specified with its total cost, the percentage of the work completed at successive stages along the project's timeline, and the amounts to be paid on each stage as agreed upon in the contract agreement. 
• SOV is a comprehensive cost breakdown of the scope that the general contractor or owners use to verify the work performed and to release payments.

Linarc simplifies and accelerates the creation and submission of monthly actual SOVs for contractors. Leveraging its advanced SOV module, Linarc automatically generates precise monthly SOVs for both Subcontractors (SCs) and the General Contractor (GC) by fetching the completion percentages of their contracted work items for the month. Contractors can efficiently review these auto-generated SOVs and seamlessly submit them to their superiors for approval. 

• The subcontractors submit their periodical SOV to the general contractor for approval before generating their invoices and payment applications for the work done during that period.
• The general contractor submits their SOVs to the owner or developer for periodical payments depending on the project completion percentages.

Workflow

Setting up the SOV Terms

The general contractor sets up the SOV terms for each subcontractor and gets consent from them. There are two main factors in the terms.

• Submission Window – Defines the specific time window each month during which the contractor must trigger and submit their Schedule of Values (SOV). Linarc streamlines this process by automatically generating the SOV on behalf of the contractor, accounting for work completed from the previous submission date to the current submission date. Additionally, the General Contractor (GC) sets a clear deadline for approving the SOV each month.
• Retainage – The percentage of money to be deducted from the total money value of the current SOV by the payer. The retainage money is accumulated with the payer and released on project completion. The retainage is for the GC/owner to have a hold on the paid party to ensure that they complete their work on time and correctly.

Once the contractor accepts the terms, they can start submitting their SOV every month.

SOV Generation

Linarc’s SOV module streamlines the creation and submission of SOVs for contractors by dynamically updating task progress and associated costs. Here’s how the process works:

• Automatic Updates -The SOV is dynamically auto-updated for each contractor based on the progress updates for all tasks they are working on.
• Task Selection for Submission  - On submission day, contractors can select the tasks they want to include in the current month's SOV and submit it for approval.
• Coverage Period - The SOV reflects progress percentages and associated costs for the period between the last month’s submission date and the current month’s submission date.
• Progress Data Integration 

 The module pulls task progress and completion percentages from the contractor’s schedule and field progress reports.

It fetches budgeted amounts for the work items from the contractor's estimate and calculates cost values based on completion percentages.

The module also incorporates work completed for change orders during the period, using approved change order estimates to determine payable amounts for the cycle.

• Contractor Review and Adjustments 

The generated SOV is presented to the contractor for review.

Contractors can manually update values, such as the cost of unused materials stocked on-site, and select work items for payment solicitation for the current cycle.

Submission for Approval

Once finalized, the contractor submits the SOV to the payment authority, typically the GC for approval.

Approval Process

• The approval authority receives a detailed report, showing the calculated values for task completion percentages, based on budget allocations made to those tasks by the GC.
• The SOV also accounts for the cost of leftover or unconsumed materials stocked by the contractor and calculates the retainage amount to be withheld for the current cycle.

Once the SOV is approved, it facilitates the creation of invoices or payment applications, ensuring a smooth and efficient payment workflow.

See the following sections to know more:

• Set up the SOV terms - General Contractor
• Review and Accept SOV Terms - Subcontractor
• View your SOV for the current period - Subcontractor
• Submit your SOV for approval - Subcontractor
• View your SOV Logs - Subcontractor
• View Received SOVs - General Contractor
• Approve Received SOVs - General Contractor
• View Submitted and Approved SOVs - General Contractor
• View Planned SOV for the Project