Build a Working Capital Strategy that Strengthens Your Financial Future:
Money, often a percentage of the total project cost, reserved to cover unexpected project costs that arise during a project. For example, a contractor starts excavating a site and hits bedrock. To remove it, different equipment needs to be brought in and the excavation takes longer than originally estimated. Contingency funds would be used to pay for this unexpected cost.
A Contingency Fund is a reserve of money set aside to cover unforeseen expenses or risks that may arise during a project. It acts as a financial safety net to address unexpected issues, changes in scope, or other uncertainties that could impact the project's budget. The amount allocated to the contingency fund depends on the project's complexity and the level of risk involved.
Reserve money for unexpected project costs.
