A cost value reconciliation (CVR) is a regular, usually monthly, construction-industry report that compares the value of work completed on each contract with the costs incurred to date. It shows the true margin on every project, highlights loss-making contracts early and supports accurate work in progress figures in the management accounts.
What it means
For each contract, the CVR sets out the value earned, including certified work, variations and anticipated final account, against actual and committed costs. The difference is the margin to date, which is compared with the margin tendered. Provisions are made for known losses.
How it works in a UK business
Commercial and finance teams meet monthly to review each contract's CVR, challenge assumptions on variations and claims, and agree the figures that go into the management accounts. Without a disciplined CVR, a contractor can report healthy profit while individual projects quietly lose money.
CVRs also inform cash forecasting, because they reveal under-valued applications, unbilled variations and retentions waiting to be released.
Frequently asked questions
Why do construction firms need a CVR?
Construction contracts run over many months with variations, claims and retentions, so ordinary accounts can hide problems. A CVR forces a contract-by-contract view of margin, giving directors early warning of overruns and supporting reliable profit figures for banks, sureties and buyers.
Who prepares the CVR?
Usually the quantity surveyor or commercial manager prepares the valuation side and the finance team provides costs. A finance director or fractional CFO then reviews the whole picture, tests judgements on final accounts and ensures the results flow consistently into the management accounts.
Last updated: 5 November 2026