Section 1
Purpose
The Final Cost Report is the QS's formal written report to the client at the conclusion of the project, summarising the financial performance of the project from original budget to agreed Final Account. It is the definitive client-facing document that records the project's cost story: what was originally budgeted, what changed and why, what the final outturn was, and what lessons can be drawn for future projects. It serves as the client's permanent financial record of the project.
Under RICS Project Financial Control and Reporting, the Final Cost Report must be accurate, honest, and genuinely useful to the client — not a backwards-looking justification of the QS's own decisions, but a clear-eyed account of project cost performance. Where the project overran budget, the report must explain why; where it was under budget, the report must explain what contingencies were not needed and why.
The Final Cost Report is also a professional record for the QS firm: it should be structured so that the cost data can inform future estimates for similar projects and contribute to the firm's knowledge base.
Section 2
Key Principles
- RICS Project Financial Control and Reporting: the Final Cost Report should include an executive summary, full budget vs outturn reconciliation, commentary on key variances, summary of claims and their resolution, and key performance indicators.
- RICS Cost Analysis and Benchmarking (2nd ed., August 2024): the report should include an elemental cost analysis in SFCA format with cost/m² GIFA benchmarked against BCIS data for the project type.
- RICS Final Account Procedures (1st ed.): the Final Cost Report is issued after the Final Account is agreed — not before; presenting the report on unagreed figures misrepresents the project's financial status.
- Professional indemnity: the Final Cost Report is a professional document that creates a record of the QS's advice; it must be factually accurate, clearly qualified where appropriate, and not contain statements that could be misleading.
- Client retention/relationship: the Final Cost Report is often one of the last documents a client sees; its quality reflects the QS's overall professionalism and will influence future appointment decisions.
Section 3
Practical Application
Step 1
Confirm that the Final Account is agreed before preparing the Final Cost Report; if any items remain disputed, the report should clearly state that the Final Account figure is subject to resolution of outstanding items.
Step 2
Prepare the Executive Summary: project name, brief description, original contract sum, final agreed sum, variance in £ and %, programme start/finish dates vs actual, key highlights and issues.
Step 3
Include the full Cost Plan Reconciliation (GN-FA-07) as a substantive section: elemental breakdown, cost movement from CP1 to Final Account, driver categorisation for each movement.
Step 4
Prepare a Commentary on Key Variations: list the top 10 variations by value, with a brief narrative on each — what was instructed, why, and what the financial impact was.
Step 5
Prepare a Summary of Claims: for each L&E/prolongation claim, note the contractor's claim, the QS's assessment, the agreed settlement, and the resolution mechanism (negotiation/adjudication).
Step 6
Include Key Performance Indicators: cost/m² final vs original; variation count and value as % of contract sum; claim value as % of contract sum; number of adjudications (if any); actual vs programmed duration.
Step 7
Include the BCIS Elemental Cost Analysis section — the structured cost data that will be submitted to BCIS; this gives the client confidence that their project data contributes to the profession's benchmarking capability.
Section 4
Common Mistakes to Avoid
- Issuing the Final Cost Report before the Final Account is agreed — presenting unagreed figures as final is professionally misleading.
- Omitting the cost driver analysis and simply listing variations — the client needs to understand why costs changed, not just that they did.
- Presenting only the client's perspective on disputed items — the Final Cost Report should record what was claimed, what was assessed, and what was agreed, without editorialising.
- Failing to include actionable recommendations for future projects — the lessons learned section is one of the most valuable parts of the report and is often omitted to save time.
- Not distributing the Final Cost Report to all relevant stakeholders — the report should go to the client, their funder (if applicable), the project manager, and be retained on the project file.
Section 5
APC Competency & Quick Reference
- Project Financial Control and Reporting Level 3 — Final Cost Report preparation, executive summary, KPIs, client communication
- Quantity Surveying & Construction Level 3 — elemental cost analysis, BCIS submission, benchmarking
What should the QS include in the executive summary of the Final Cost Report?
Project name and brief description; original contract sum; agreed Final Account sum; variance in £ and %; programme start/finish dates vs actual; key highlights and issues (e.g. major variation, claim resolution, programme extension). The executive summary should be 1–2 pages maximum and intelligible to a non-technical client.
How should the QS handle a situation where the project significantly overran budget?
The Final Cost Report must give an honest account of why the overrun occurred, categorised by driver (design development, scope change, market, risk events, post-contract). The QS should not attempt to minimise the client's awareness of overrun drivers; if the QS's own estimates were inaccurate, this should be acknowledged and explained. Honesty under RICS Rules of Conduct is non-negotiable.
What KPIs should a QS typically report in the Final Cost Report?
Cost/m² final vs original estimate; variation count and total value as % of contract sum; claim value as % of contract sum; number of adjudications; actual project duration vs programmed duration; retention % held and released dates; number of open disputes at Final Certificate. These KPIs enable consistent comparison across projects and support the firm's benchmarking programme.
Section 6
Completion & Final Account Checklist
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Task
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Final Account agreed before report issued (or clearly flagged if not)
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Executive summary prepared: original sum, final sum, variance, programme dates
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Cost Plan Reconciliation included as substantive section
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Commentary on top 10 variations by value prepared
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Summary of claims with QS assessment, agreed figure, and resolution mechanism
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KPIs calculated and presented in tabular format
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BCIS elemental cost analysis included and submitted to BCIS
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Recommendations for future projects included
Section 7
CPD Learning Outcomes
- Prepare a structured Final Cost Report incorporating an executive summary, cost reconciliation, variation commentary, claims summary, and KPIs in compliance with RICS Project Financial Control and Reporting requirements.
- Present project cost performance data honestly and clearly to clients, including where projects have overrun and explaining cost driver categories accurately.
- Calculate and report project KPIs and BCIS elemental cost benchmarks, contributing project data to the BCIS database in compliance with RICS Cost Analysis and Benchmarking (2nd ed., August 2024).
Section 8
Further Reading
- RICS, Project Financial Control and Reporting (Black Book)
- RICS, Cost Analysis and Benchmarking, 2nd edition, August 2024
- RICS, Final Account Procedures, 1st edition (Black Book)
- RICS, Cost Prediction PS, effective 1 January 2020
- BCIS Standard Form of Cost Analysis (SFCA) — bcis.co.uk
- RICS Rules of Conduct 2021 — honesty and integrity in professional reporting
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