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Cash FlowGlossary Term

Alteration

A formal change to an existing contract's scope, timeline, or pricing. Subcontractors must document alterations in writing to protect payment entitlements. Verbal agreements alone rarely hold up during disputes or audits.

Related Terms

Differential

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A pay premium added to a base rate for working in hazardous, remote, or demanding conditions. Subcontractors should account for applicable differentials when pricing bids and setting crew rates.

Face Exposure

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The total dollar value of unpaid invoices a subcontractor has outstanding with a single client at any given time. High face exposure increases financial risk if a client delays payment or becomes insolvent. Subcontractors should monitor face exposure closely to avoid over-reliance on one payer.

CAPE (Consolidated Administration and Processing of Entries)

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A centralised system used by operators to consolidate and process contractor timesheets, work records, and billing entries. Subcontractors submit field data through CAPE to trigger payment and compliance verification. Accurate, timely entries are critical to avoiding payment delays.

Price Spread

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The difference between what a prime contractor charges the client and what they pay the subcontractor for the same scope. A wide price spread reduces your effective rate and margin. Negotiating tighter spreads protects subcontractor profitability on long-term contracts.

Construction Inflation

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The rate at which labour, materials, and equipment costs rise over time on construction projects. For subcontractors, it can erode fixed-price contract margins if bids don't account for escalating costs. Escalation clauses in contracts help protect against unexpected cost increases during long-duration scopes.

Red Flag Warning

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A signal that a client or project poses serious financial or operational risk to a subcontractor. Common triggers include late payments, scope disputes, or sudden crew access restrictions. Recognising these early helps subcontractors protect revenue and avoid costly disputes.

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