How to Manage Provisional Sum Items

💡A provisional sum lets you include an estimated cost for a line item in your estimate when the exact cost isn't yet known. For example, before a subcontractor's actual invoice comes in. Once the actual cost is known, you can reconcile the difference between the estimated and actual amounts.

Steps:

Adding a provisional sum item

Within an estimate, select the Provisional Sums button.

Add the appropriate cost centre, for example, Cabinetry.

Input the specific details for the line item, along with the provisional material and labour quantities and rates.

When your estimate is complete, lock it and submit it as quoted.

After acceptance by the client, select the Authorise button to update the status of your estimate.

Reconciling a provisional sum item

Once physical works have been completed, you'll typically receive an accounts payable invoice from your subcontractor detailing the actual cost of the provisional sum item. If the actual cost differs from your estimated provisional sum, the difference can be reconciled:

Navigate to the appropriate estimate and select Reconcile Provisional Items from the bottom of the screen.

In the Reconcile dialog, update the provisional material and labour quantities and rates with the actual quantities and rates.

Select Reconcile.

👉 Loop Logics will automatically generate a reconciliation scope in Draft status that represents the difference between the estimated and actual costs. This reconciliation scope can then be locked, submitted as quoted, and authorised in preparation for submission to the client.

FAQ

What happens if the actual cost matches the provisional sum exactly? If there's no difference between the estimated and actual quantities and rates, reconciling will generate a reconciliation scope with a $0.00 difference.

Does reconciling change the original provisional sum line item? No. Reconciling generates a separate reconciliation scope representing the difference, rather than editing the original authorised estimate directly.

Can I reconcile more than once for the same provisional sum item? Reconciliation is based on the actual costs you enter at the time, reflecting the difference from what's currently recorded. Check with your process for how your team handles multiple invoices against the same provisional sum item.

❓ Need Help

If you have questions or need assistance, use the chat box in the bottom-right corner to contact the Loop Logics support team or email support@looplogics.com