The final payment is usually more than a simple percentage of the work that remains to be completed. Completing the project might involve fixing the most difficult problems that are disproportionately expensive to solve, so the final payment should be large enough to motivate the vendor to give the project a high priority so that the project can be completed on time.
If the supplier has met all the contractual obligations, including fixing problems and making repairs as noted on a punch list, the project team signs off on the contract and submits it to the accounting department for final payment. The supplier is notified that the last payment is final and completes the contractual agreement between the supplier and the project.
Overtime Needed to Complete Project and Earn Final Payment
The building automation vendor devoted additional personnel and paid them overtime wages to troubleshoot the problems and get them resolved so the building could open on time. When the project team was satisfied, they approved the system and the final payment.
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