Variations on Account are typically used when a contractor QS who is reviewing the variation from the subcontractor is unsure what to value the works and needs to value a ‘Nominal Value’ as the works are time sensitive and cannot be stopped until the QS can get clarification from the business on whether it is approved and at what value.
When contractor users are reviewing a variation request they will have a new option to set the type to ‘On Account’. WebContractor will then require the user to set a Nominal Value (see fig 1.1), this is the ceiling limit of how much can be certified ‘On Account'.
Note: When a Variation is set to On Account it must eventually be approved or rejected before the Final Account Process can be started
Fig 1.1 displaying the Variation Request Type set to On Account allowing entry of a ‘Nominal Value’
On Account Variations can be Applied for, valued, certified and paid.
What happens if the On Account variation is rejected?
If an On Account variation is rejected, WebContractor will create a reversal transaction and, where appropriate, will allow contractors to recover the rejected ‘On Account’ amount.
See below in fig 1.3, in the Variation -> On Account sub-section there are several rejected On Account variation transactions listed, these cover the following scenarios (as per fig 1.2 below):
Scenario | WebContractor Actions |
Variation On Account has NOT been applied for or certified and the contractor rejects it. | Variation is rejected and is recorded as rejected, the subcontractor cannot apply and contractor cannot value. |
Variation On Account has been applied for by the subcontractor and the contractor rejects it. | Variation is rejected and WebContractor creates a reversal for the applied for amount. The variation is recorded as rejected, the subcontractor cannot apply and contractor cannot value. |
Variation On Account has been applied for by the subcontractor and valued/certified by the contractor and then contractor rejects it. | Variation is rejected and WebContractor creates a reversal for the applied for amount. An additional ‘recharge’ line only visible to the contractor to created for them to reclaim the valued/certified amount on the next payment certificate or stagger it across multiple certificates. The line appears with a note on what it is reversing. |
Fig 1.2 Illustrating the reject scenarios
Fig 1.3 displaying a Valuation with rejected On Account Variations (at the bottom of the screen under 'On Account' section) illustrating how WebContractor reverses out rejected On Account variations.