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Cash Flow Glossary 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

Bid Accuracy

Cash Flow

How closely a submitted bid reflects the actual cost of completing a job. Poor bid accuracy leads to underbilling, cost overruns, or lost contracts. Subcontractors track it to sharpen estimating and protect margins.

Lump Sum

Cash Flow

A pricing model where the contractor agrees to complete a defined scope of work for a fixed total price, regardless of actual costs incurred.

Suspension Clause

Cash Flow

A contract provision allowing the prime contractor or owner to pause work without terminating the agreement. Subcontractors may be entitled to standby rates or cost recovery during the suspension period. Review these clauses carefully, as payout terms and notice requirements vary widely.

Wholesale Cost

Cash Flow

The base price a subcontractor pays to source materials, equipment, or supplies before adding markup. Understanding wholesale cost helps field service companies price jobs accurately and protect margins. It is the starting point for calculating billable rates to clients.

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.

Net Pay

Cash Flow

The amount a subcontractor or field worker actually receives after all deductions — such as taxes, union dues, equipment charges, or mobilisation costs — have been subtracted from gross earnings. For subcontracting companies, tracking net pay against invoiced amounts is critical to maintaining healthy margins on field projects.

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