What is an Authority to Commence Construction (ACC)? It is used as a type of checklist and authority form to confirm that ALL required approvals have been received and construction can commence on the job.
I quite often hear “Yes, but I’m a small building company and I know what is going on in my business so I don’t need to tick off a checklist before starting construction.”
Regardless of whether you are a small building company or a large volume builder, a sign of a well-run business is the use of checklists and processes that are carried out EVERY time and consistent, regardless of staff involved. What happens if you start a new staff member? Will they know what needs to be done prior to starting construction on-site?
Because there are numerous approvals and documents required to be signed off prior to commencing construction, an ACC is a good process to put in place as good governance in a building business and for risk management. It ensures that those responsible for giving the 'green light' to start construction are sure all the approvals and required signatures are in place. I have seen situations where verbal instructions were used, and one person thought the approvals had been received and gave the 'green light' when in fact they had not. An expensive mistake that can be avoided by using an ACC. This process is critical as your business grows and you need to have confidence the staff are following the correct processes and it de-risks your business in this area.
Another error I have seen may times is where staff believe that the finance approval from the lending institution is all that is needed to commence construction. Always check with the lending institution once you receive the initial finance approval to see if they will be issuing their own “Authority to Commence Construction”.
In all my years of experience in the building industry, lending institutions will always issue their own ACC. Circumstances can change between the time the finance approval was issued and the time when it is nearing construction start. In one instance, if the construction had started using the finance approval, the builder would have constructed the slab, ordered and paid for the frames and trusses as well as the sub contractor’s work for the slab. The client’s circumstances changed, and the bank rescinded the finance approval once the builder had contacted them. An expensive exercise to remove all that work. Never, ever, trust the finance approval on its own. Always ensure you have the “Authority to Commence Construction” from the lending institution before starting on-site.
The ACC becomes the ‘official’ trigger for the job to commence onsite and the site supervisor has it in writing and then knows he has the ‘green light’ to get moving on the job.
It’s surprising how many builders I come across that do not use this type of checklist or process to ensure they have all the approvals in place before starting on-site. You might think that you are small and can remember all the details. What happens when you start to grow and you need to devolve this function to another staff member? As I have said before, “If your business is setup for growth, then you will grow”.
Having this process and checklist in place also gives you, the business owner, peace of mind that all the correct checks are being done at the right time. A hallmark of a quality and professional business.
The 3C Mentor Builders’ Business Resource website has an ACC available for ready use so you don’t need to think about all the approvals required before construction.
Check it out in the Resource Centre.
The whole purpose of The 3C Mentor and Alpha Edge is to help create really great businesses in the residential building industry and delivered by our unique ‘Four Pillars to Your Success’ – Business Coaching, Business Consulting, Business Resources and Construction Software.
For an overview of these four pillars go to Alpha Edge here. To find out more about our Business Coaching go to The 3C Mentor here, for further information about the services Alpha Edge can provide go directly to Alpha Edge here and to access the many documents and resources you need as a residential builder, go to our Builder’s Business Resource Centre here. For more information on the construction software and how to ‘Be a Better Builder’, click here
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