A charge issued by an operator or general contractor to a subcontractor for costs incurred due to defective work, delays, or failure to meet contractual obligations.
Backcharge
Related Terms
LEM (Labour, Equipment, Materials)
Cash FlowA breakdown of costs on a field ticket or invoice, separating charges into labor hours, equipment usage, and materials consumed.
DPO (Days Payable Outstanding)
Cash FlowA measure of how long a company takes to pay its invoices after receiving them. For subcontractors, a high DPO from your client means slower payment and tighter cash flow. Tracking client DPO helps you anticipate payment delays and manage operating costs.
Capacity Charge
Cash FlowA fee billed to clients to reserve your crew, equipment, or services during a set period — whether fully utilised or not. It protects subcontractors from revenue loss during standby or low-demand phases. Common in long-term service agreements for drilling, frac, or maintenance contracts.
Close-Out
Cash FlowThe final phase of a contract where all work is confirmed complete, documentation is submitted, and outstanding invoices are settled. For subcontractors, delays in close-out often mean delayed final payment. Completing punch lists, timesheets, and lien waivers promptly helps accelerate the process.
CAPE (Consolidated Administration and Processing of Entries)
Cash FlowA 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.
Settling System
Cash FlowThe process a prime contractor or operator uses to review, approve, and finalise invoices before releasing payment to subcontractors. Understanding the settling system helps subs forecast cash flow and avoid payment delays. Timelines vary widely between clients, so confirm the cycle before mobilising.
Latest Cash Flow News
Talos Energy Takes 50% Stake in Repsol's Deepwater Mexico Block
Talos Energy will pay up to $50 million to acquire a 50% working interest in Repsol's Block 29 offshore Mexico, targeting FID in 2027 on a discovery holding over 200 MMboe.
6 days agoCash FlowGordie Howe Bridge Set to Open Monday After Canada-Only Ceremony
Windsor held a Canada-only ceremony for the Gordie Howe International Bridge ahead of Monday's opening, after Ottawa scrapped a joint U.S. event amid tariff tensions.
11 days agoCash FlowNew CHPE Line Pushes NY-Canada Power Trade to 18-Month High
The EIA reports New York imported a record 52 GWh of Canadian electricity on July 3 as the new Champlain Hudson Power Express line ran at full 1,250 MW capacity during a summer heat wave.
14 days agoCash FlowDOL's $162M Apprenticeship Fund Ties Payouts to Worker Retention, Not Enrollment
The Department of Labor's $162 million Pay-for-Performance apprenticeship program pays contractors only after apprentices hit retention milestones, with sponsor applications opening this fall in shipbuilding, telecom, and skilled trades sectors.
17 days agoRelated Guides
What Happens to Subcontractor Billing When a Project Stalls, Goes Over Budget, or Never Gets Commissioned
You did the work. The project was cancelled, shelved, or never activated. Here is what subcontractors need to know about billing rights, legal remedies, and how to get paid when no one wants to discuss the invoice.
Cash Flow GuideMechanic's Lien Rights for Subcontractors: What to Do When You're Not Getting Paid
A practical guide to mechanic's lien and materialman's lien rights for oilfield and construction subcontractors in Texas, Oklahoma, and Alberta — deadlines, filing steps, and leverage tactics.
Cash Flow GuideJob Costing for Field Service Companies: How to Know If You're Actually Making Money
A practical job costing guide for oilfield and construction subcontractors. Track labor, equipment, and materials per job to find profit leaks and bid smarter.
Stay sharp on field operations
Industry news and insights, delivered to your inbox.
Subscribe to FieldNews
