A reduced invoice amount offered to prime contractors or clients who pay before the standard due date. Common terms like 2/10 Net 30 mean a 2% discount if paid within 10 days. Subcontractors must weigh the cash-flow benefit against the revenue they give up.
Early Payment Discount
Related Terms
DSO (Days Sales Outstanding)
Cash FlowThe average number of days it takes to collect payment after a sale. For field service companies, DSO measures how long between completing work and receiving payment. Industry benchmarks range from 30-60 days.
Rule 144a
Cash FlowA U.S. securities regulation allowing large private companies to raise capital without a public stock listing. For subcontractors, it signals a major client may have access to significant private funding. This can affect contract stability and payment capacity on large projects.
Embedded Cost
Cash FlowExpenses already built into a contract rate that cannot be billed separately, such as mobilisation, PPE, or overhead. Subcontractors must identify these upfront to avoid absorbing unrecovered costs. Missing embedded costs during bid review is a common source of margin loss.
Capped-Call Transactions
Cash FlowA financial tool used by larger contractors to manage costs when issuing convertible debt. It limits share dilution, helping protect company ownership structure. Subcontractors may see clients reference these when explaining capital raise decisions affecting project budgets.
Consignment Inventory
Cash FlowMaterials or equipment stored at your job site but owned by the supplier until you use them. You only pay when items are consumed, reducing upfront capital tied up on remote projects. Common for frequently used consumables like fittings, gaskets, and PPE on long-duration field contracts.
Construction Input Costs
Cash FlowThe direct costs subcontractors pay to deliver field work, including labour, materials, fuel, and equipment. These costs fluctuate with market conditions, directly squeezing margins if contracts aren't priced accordingly. Tracking them closely helps subcontractors identify when to renegotiate rates or escalation clauses.
Latest Cash Flow News
Cash Flow Strategy Gives Contractors an Edge in Volatile Market
Engineering News-Record outlines how contractors can manage cash flow through payment term negotiations, digital payments, and financial planning tools to stay competitive amid rising costs and economic uncertainty.
9 days ago Cash FlowChariot Backs Angola Offshore Deal With $12M, Gains Access to 4,000 bpd from Chevron-Operated Block
Chariot is financing an Angolan offshore acquisition with $12 million, securing production-linked cash flows from Block 14, a Chevron-operated asset producing around 40,000 bpd gross since 1999.
19 days ago Cash FlowIran Conflict Pressure Tests Oil Prices as US E&P Returns Hit Four-Year Lows
A new conflict involving Iran is rattling oil markets at the worst possible time, as US exploration and production companies were already posting their weakest financial returns since 2021. Here's what subcontractors need to know.
20 days ago Cash FlowKnife River Completes Third Mountain Region Acquisition with Montana Ready-Mix Buy
Knife River Corp. has acquired Donaldson Brothers Ready Mix in western Montana, marking its third acquisition in the Mountain segment in early 2026 as the company pursues vertically integrated growth in mid-size markets.
23 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 GuidePost-Completion Warranty and Punch Work: Protecting Your Margins After the Job Ends
Warranty walks, punch lists, and post-completion callbacks eat into subcontractor margins. Learn how MSA warranty clauses work, when you can push back on mobilization costs, and how to document your way out of disputes.
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.
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