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Schedule of Values (SOV)
What is a Schedule of Values (SOV)?
A Schedule of Values (SOV) is a detailed breakdown of a construction contract that itemizes the total contract amount into specific work categories, phases, or deliverables. It shows the dollar value assigned to each component of work that’ll be completed during a construction project. As such, the SOV is a critical component of successful project and cash flow management. It also lays the groundwork for progress billing and payment applications (like AIA® G702/G703® forms).
Here’s how it works:
- Contractors create initial SOVs that allocate contract value across work phases.
- They maintain the SOVs to align with actual work schedules and ensure billing requests match project progress.
- SOVs get updated when changes occur on the job, altering the original scope and budget.
As you can imagine, managing multiple SOVs across projects while tracking actual costs against line items becomes complex and time-consuming.
Siteline streamlines this entire process by integrating with major construction ERPs and accounting software. Subs import project data from their ERP into Siteline, compile and send pay apps directly in the system (accounting for any change orders), and then rest easy knowing that Siteline automatically syncs approved invoices back to the ERP.
The result? Faster billing cycles and quicker payments. Want to see how it works? Book some time with us.
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Other construction terms
What is Accounts Payable (A/P)?
Accounts Payable (A/P) in the context of the construction industry refers to the amount of money a company owes to its suppliers or vendors for goods and services received but not yet paid for. These could range from raw materials bought for construction, to equipment rental fees, to labor costs for contractors. Essentially, they are debts that a construction company needs to clear within a specified timeline. Managing A/P effectively is crucial in the construction industry to maintain positive relationships with suppliers and vendors, ensure a steady supply of materials and services, and promoting healthy cash flow. Regular reviews of the A/P process can help avoid potential financial hiccups and keep the construction projects running smoothly.
What is an Allowance?
In construction, an allowance is a predetermined dollar amount included in a contract to cover materials, fixtures, or finishes that haven’t yet been selected. Allowances are typically used for flooring, lighting fixtures, plumbing fixtures, appliances, or other finish materials (things that contribute to the project’s aesthetic) where the owner may want flexibility to make selections as the project evolves.
Here’s how allowances work: When contractors bid on a project, they’ll include specific allowance amounts (e.g., $5,000 flooring allowance). Once construction begins and the owner chooses actual materials, the costs are reconciled against the allowance. If the materials cost less, they receive a credit. If more, the owner pays the difference via a change order.
Siteline can help you track and manage those change orders, ensuring you get paid for that difference. Learn more about how Siteline streamlines change order management here.
What are Fixed Assets?
Fixed assets, also known as property, plant, and equipment (PPE), are long-term tangible assets owned by a business for the production, supply, or rental to customers. Within the construction industry, these assets are essential as they are not only used in day-to-day operations but are crucial for long-term business growth. They encompass a broad range of items such as buildings, heavy machinery, land, vehicles, and other tools or equipment. These assets are distinguished by their durability and are not to be sold throughout regular business operations. The value of fixed assets is reflected on the balance sheet and it decreases over time due to normal wear and tear, also known as depreciation. Real estate, construction equipment like cranes or bulldozers, and even software used for project planning are some examples of fixed assets in the construction industry. They are considered investments because their utilization helps to generate income.
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