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Cash FlowGlossary Term

Callbacks

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.

Related Terms

Fixed-Rate Contract

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A contract where the subcontractor agrees to complete a defined scope of work for a set price, regardless of actual labour or material costs incurred — meaning cost overruns come directly out of your margin. Common in construction and turnaround work, these contracts reward efficient crews and tight project management but carry significant financial risk if scope creep or site conditions aren't carefully managed upfront.

Unit Rate

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A pricing model where work is billed per unit completed (per meter drilled, per cubic meter hauled, per joint welded, etc.).

Price Book

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A document listing agreed-upon rates for various services, equipment, and materials between an operator and contractor. Field tickets are validated against the price book before approval.

Net Pay

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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.

Fuel Escalation Clause

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A contract provision allowing subcontractors to adjust their billing rates when fuel costs rise beyond an agreed threshold. It protects field crews and equipment operators from absorbing unexpected fuel price spikes. Without this clause, subcontractors bear the full risk of fuel cost increases mid-contract.

Job Costing

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The process of tracking all costs associated with a specific job or project, including labor, equipment, materials, and overhead. Accurate job costing is essential for understanding profitability.

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