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Cash FlowGlossary Term

Builders Lien

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.

Related Terms

Cost-Escalation Clause

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A contract provision allowing subcontractors to adjust their rates when material, labour, or fuel costs rise beyond a set threshold. It protects field service companies from absorbing unexpected cost increases on long-term projects. Without one, subcontractors are locked into original pricing regardless of market changes.

Callbacks

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A return visit to a job site to fix work that failed inspection or did not meet spec. Callbacks are unpaid rework that directly cuts into a subcontractor's margin. Minimising them is critical to staying profitable on fixed-price contracts.

DPO (Days Payable Outstanding)

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A 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.

Bid Accuracy

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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.

Close-Out

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The 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.

Wholesale Cost

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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.

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