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Cash FlowGlossary Term

Bridging Capacity

A subcontractor's ability to fund ongoing operations while awaiting payment from a prime contractor or client. It covers payroll, equipment costs, and materials during invoice gaps. Strong bridging capacity keeps crews mobilised and contracts on track without cash shortfalls.

Related Terms

Builders Lien

Cash Flow

A legal claim registered against a property when a subcontractor hasn't been paid for work or materials provided. It secures your right to payment by encumbering the owner's title. Filing deadlines are strict, so act quickly if invoices go unpaid.

Ticket Rejection

Cash Flow

When an operator returns a field ticket for correction before approval. Common causes include missing information, rate discrepancies, or insufficient documentation. Rejections delay payment and require rework.

Headline Inflation

Cash Flow

The overall rate of price increases across the economy, including fuel and materials. For subcontractors, it signals rising operating costs that may not be covered by fixed-rate contracts. Monitor it when renegotiating agreements or submitting bids.

Rack and Carriage

Cash Flow

A pricing structure where subcontractors charge a marked-up "rack" rate for materials, plus a separate fee for delivery or handling. It allows field service companies to recover supply chain costs beyond base labour rates.

Price Spread

Cash Flow

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.

Policy Rate

Cash Flow

The interest rate set by the Bank of Canada that influences borrowing costs across the economy. When it rises, lines of credit and equipment financing become more expensive for subcontractors. It also affects how quickly clients pay invoices, tightening cash flow across the field service sector.

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