Financial success on a project is impossible to achieve without an appropriate robust commercial mechanism.
It is essential to implement a well designed Target Cost contract when a Client aims to:
Lump sum contracts just won’t deliver these objectives.
A Target Cost contract that is administered through Open Book Accounting will deliver these objectives when it is:
Driven by the need to deliver better value for money, many public sector clients are actively embracing Target Cost contracts and Open Book Accounting.
Stradia provides the right advice to help Clients and Contractors succeed and prevent them from falling into the common pitfalls, which can result in wasted time and higher costs rather than generating the promised cost savings and value for money.
Common pitfalls include:
To implement Target Cost contracts and Open Book Accounting successfully the whole project team must have a thorough understanding of how to:
The Client’s role - to lead and manage the process
The Contractor’s role - to provide accurate, timely information in the format required by the Client and to work closely with the Client to reduce costs and/or maximise design opportunities
How we can help
Our bespoke services build your team’s expertise and promote best practice, with the benefits of improved financial control, demonstrable value for money, quicker implementation, less pressure and frustration for team members and no wasted time on systems that don’t deliver.
Our Target Cost & Open Book Accounting services include:
Stradia, in partnership with the Chartered Institute of Public Finance and Accounting (CIPFA), has developed an Open Book Accounting fact sheet, which provides an introduction to the principles of open book accounting for organisations that are new to the subject or in the early stages of developing open book systems and processes in support of a target contract.
Please contact us to ask any questions or to discuss your situation in total confidence
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