Provisional does not mean uncontrolled
Each provisional amount should have a defined purpose, approval route, supporting estimate and conversion mechanism. Management should track the original allowance, commitments, forecasts and remaining exposure.
Control related appointments
Third-party advisers, reimbursable costs and handling charges can expand the effective project cost beyond the headline professional fee. Commercial treatment should be established before appointments are made.
Link change to the business case
Material design, scope, schedule or risk changes should be assessed against feasibility, affordability, funding and expected returns—not approved only as technical variations.
Maintain an executive view
A concise commercial register should bring together changes, provisional sums, commitments, decisions and forecast impact so management can intervene before exposure becomes irreversible.
This article provides general information and does not constitute financial, investment, legal or tax advice.