This article is a guide to the set up and use of Financial Limits within FastDraft.
This guide contains the following topics:
- Introduction
- Financial Limits - Company Level
- Financial Limits - Contract Level Override
- Financial Limits - Contract User Level
- Financial Limits - Contract Level
- Financial Limits Validation
Introduction
Whilst the terms of a contract rarely place any financial limits on the authority of a particular person (e.g. Standard wording of an NEC3/4 ECC contract places no limits of the value of work that can be instructed by the Project Manager), an organisation may wish to apply internal controls that restrict the value of change that can be instructed without prior approval.
In FastDraft a limit can be applied to users at company level and if necessary limits can be overridden at an individual contract level (e.g. if a user is acting at a higher level of authority on one contract only or if a limit check needs to be applied in a different currency).
A single limit will apply to any process where the process is configured to require a limit check but will only apply where a financial value is captured (i.e. it’s currently not possible to prevent a Project Manager’s Instruction from being issued as, at the point of issue, the Instruction has no financial value assigned).
Financial Limits - Company Level
Limits are set by exception. In other words, by default, FastDraft applies no limit checking and even where limit checking is enabled if no limit is set for an individual user then no limit check will be applied.
To set a limit for a company user you will need to go to the Company page and the click on the company user and then set the 'Apply Financial Limit' toggle to Yes.
At that point you will be required to populate the additional limit and currency fields.
Note that limits are set in a single currency and no currency conversion is applied so a limit set in GBP for example will apply to contracts priced in GBP. If you need to apply limits to a contract in a different currency you will need to set a separate limit for the user at contract level.
Contract Overview
Financial Limits - Contract Level Override
Contract Overview
The Contract Overview page contains a toggle Contract Level Financial Limit Enabled. This is an override and should only be set if you need to override the limit set at company level (i.e. if any user requires a different limit for this contract only due to acting outside their normal authority or due to the contract being in different currency than their company level limit).
Setting Contract Level Financial Limit Enabled to Yes will ignore any company level limits and require you to set a separate limit (for each user that requires a limit) at contract level.
If you want Company level limits to apply you should Contract Level Financial Limit Enabled set to No.
Contract Template
Irrespective of whether limits are set at Company level or at Contract Level, in order for the Financial Limit functionality to work within FastDraft, it needs to be enabled within the contract template. The following workflows provide the option to toggle Financial Limits on/off:
- Compensation Events - PM/Supplier
- PM Proposed Instructions
- PM Assessments
- Supplier Proposals (Submissions With Quote)
- PM Payment Certificates
- PM Task Orders/Request For Quote
- PM Project Orders/Instruction To Quote
Follow the steps below to enable Financial Limits within your chosen workflows:
- In the left-hand navigation panel, select Contract Template.
- Select the Workflows tab.
- Select the workflow you wish to apply the Financial Limits functionality to, then select the Workflow tab.
- Within the pop-up, toggle Financial Limit Enabled on.
- Select Update Workflow, then Update Workflow Group, then click the blue Update button.
Financial Limits - Contract User Level
Summary
If you have applied a financial limit to a Company User that limit will apply for all contracts to which the user has been added as a Contract User and for each workflow that has limit checking enabled. In most cases that’s effective and the most efficient way to capture a limit (i.e. a single limit per user based on the fact the user will have a single limit of delegated authority set by their company). However, in some cases an individual user may act on behalf of multiple joint ventures and/or in different roles that may require the user to have different financial limits that apply on different contracts. This capability would also be useful in cases where a contract currency differs from the currency of the users limit as it would enable contract limits to be set in the currency of the contract (thereby avoiding the complexity of currency conversion).
FastDraft Set Up
To override company level limits the Contract Level Financial Limit Financial Limits can be enabled within a contract by following the below steps:
- In the left-hand navigation panel, select Contract Overview.
- At the bottom of the page, toggle Contract Level Financial Limit Enabled on.
- Click Update.
Financial Limits - Contract Level
Summary
Once you've toggled Contract Level Financial Limit Enabled to Yes, you must set limits for individual contract users at contract level. In this scenario, you've configured the contract to override any company level limit checks so failure to set a limit for a contract user will mean no limit check applies.
The following steps will need to be repeated for each user that requires a limit:
- In the left-hand navigation panel, select Contract Users.
- Select Add User.
Note: Once a user has been added to a contract they cannot be edited; if you wish to add Financial Limits to an existing contract user you will need to Remove them, then re-add them.
- In the Add Contract User pop-up, enter the Financial Limit amount and currency.
- Once you are done, select Save.
Within the Contract Users register you will be able to see each user's Financial Limit within the columns below:
Note: Contract Financial Limits will override Contract User Financial Limits - for example if you are adding a user, who already has a £7500 limit at a user level, to a contract with a £5000 limit, their Financial Limit within the contract will be £5000 not £7500.
Financial Limits Validation
If a user with an applied Financial Limit tries to submit a notice, or approve a notice, that involves a quote where the value is above their Financial Limit, the below validation will appear and their submission will not be completed.
In that case, the user should click Save Draft instead and they will be prompted to notify another contract user who does have authority to send the communication.
When using limit checking, you will need to make sure you have issued formal delegations to ensure that all senders are appropriately authorised under the terms of the contract.
Note: FastDraft does not perform any foreign exchange calculations so Financial Limits are not compatible with FastDraft's Secondary Prices feature. All limits are set in a single currency and amounts in that currency (where configured to do so) will be checked against the user's Financial Limit.
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