Beacon News

Beacon Consulting Group has extensive experience managing construction project funds to ensure that contractors and suppliers involved get paid in a timely manner, but not until their associated service(s) or project milestones are completed and verified. To do this, Beacon uses a formal funds-control process that is integrated into an overall project management / monitoring plan or which can be provided as a stand-alone service.

We customize our funds control process, depending on specific customer needs, the size/complexity of a project, how many contractors are involved, and what processes or financial controls are already in place. Our project management team works hand in hand with our financial team and well-established banking / escrow partners to provide funds control services in a highly professional, transparent and accountable manner.

There are many reasons for implementing a formal funds-control process for construction projects, including:

• Surety companies may require third-party funds control—for risk management reasons—especially when working with a new or growing general contractor (or for other reasons). Funds control reduces risk by ensuring that payments are disbursed only upon completion of project milestones.
  
  
• Construction lenders, project owners and equity partners in development projects may require funds control for similar risk-avoidance / risk-management reasons.
  
  
• Funds control is a process that can help elevate the quality and professionalism of many projects by necessitating more diligent up-front planning, more effective communications, more frequent/detailed progress reports, and clear accountability for staying on schedule and within budget.
  
  
• Some general contractors welcome third-party funds control because it helps them to manage projects in a more professional manner, while freeing them from certain responsibilities and risks. For example, some contractors would prefer to avoid the potential liabilities of managing cash flow or relationship challenges associated with withholding subcontractor payments until specific agreed-to items are completed (or associated subcontractor paperwork/documentation is provided).

Beacon’s comprehensive construction project management expertise makes us uniquely qualified to handle the funds-control process. We understand all technical and financial aspects of a construction project, from cost estimation through on-site management and project completion.

As result of our long track record of successfully turning around troubled construction projects for Surety clients, Beacon’s team is highly skilled at:

• Planning/Budgeting: Reviewing (or creating) detailed project budgets and schedules—factoring in appropriate cash-flow plans for work and materials associated with subcontractors and key suppliers
  
  
• Discrepancy Identification: Quickly finding discrepancies between project cost estimates and actual cash required for project completion
  
  
• On-Site Evaluations: Ability to provide competent, on-site evaluations of work completed (for verification and QA purposes) prior to disbursing payments
  
  
• Cash Flow Management: We ensure that all disbursements made are tied to appropriate completion milestones. We are experts at implementing controls to ensure that appropriate records are reviewed and managed to justify and track all disbursements made
  
  
• Early identification of financial issues: Such as change orders that will affect projects costs and time to complete, subcontractors or suppliers who are over-billing or underperforming, or specific tasks that have been “underbid” or “overbid”
  
  
• Reporting/Communications: We are accustomed to communicating with many different project stakeholders
  
  
• Record Keeping: Ensuring that appropriate records are maintained related to contracts, disbursements, invoices, and related financial records

For more information about Funds Control & Beacon Consulting Group’s other construction consulting services, Visit Our Website > www.beacon.ws/services.php

Email Beacon Consulting Group, Inc. for project inquiries or to request a consultation.