Budgeting during the construction phase
The construction stage of any asset development work often presents the biggest financial risk to an organisation, so budgeting and forecasting are particularly important during this phase.
The development of assets doesn’t always go to plan. To help protect and plan for any unforeseen circumstances and expense, your organisation should develop forecasts based on different scenarios, such as delays in the timetable or cost increases.
The earlier that any risks, additional expense, and challenges can be identified, the easier it is to make any required adjustments or source solutions to resolve these problems.
Insurance
If taking on the freehold or lease of an asset, it’s important that you are clear on responsibilities for arranging buildings insurance.
During any construction, your contractor will be insured for any damages that may occur. However, it's good practice to check with your own insurance provider to ensure that you’re also covered during this period.
In some leasehold arrangements, buildings insurance is taken out by the local authority and charged to your organisation.
In such cases, it is important to check the terms of the insurance policy, the amount of any excess you would be required to pay and who would be responsible for future liabilities in the event of damage and interruption to your activities.