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Cash FlowGlossary Term

Face Exposure

The total dollar value of unpaid invoices a subcontractor has outstanding with a single client at any given time. High face exposure increases financial risk if a client delays payment or becomes insolvent. Subcontractors should monitor face exposure closely to avoid over-reliance on one payer.

Related Terms

Well Abandonment Liability

Cash Flow

The legal and financial obligation to properly plug and decommission a well at end of life. For subcontractors, unpaid invoices near abandonment projects carry higher collection risk. Operators may deprioritise vendor payments as they wind down a well's operations.

Phased Handover

Cash Flow

A structured process where completed sections of a project are formally transferred to the client in stages rather than all at once. Each phase triggers its own inspection, sign-off, and often a progress payment. Subcontractors must track completion milestones carefully to avoid billing delays.

Operating Days

Cash Flow

The number of days equipment or crews are actively deployed and generating billable revenue on a job site. Subcontractors use this figure to track utilisation, forecast earnings, and negotiate day-rate contracts. Downtime, mobilisation delays, or weather shutdowns typically do not count as operating days.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation)

Cash Flow

A measure of a subcontractor's core operating profitability, stripping out financing and accounting costs. It helps field service companies assess whether their contracts and crews are generating real operational value. Clients and lenders often use it to evaluate a subcontractor's financial health before awarding work.

Seasonal Norms

Cash Flow

Expected fluctuations in workload, crew demand, and billing cycles tied to specific times of year. In oil & gas and construction, busy seasons drive higher rates and faster payments. Slow seasons often mean delayed invoices, reduced headcount, and tighter cash flow.

Scope Creep

Cash Flow

The gradual expansion of work beyond what is outlined in the original contract, often without additional compensation. Subcontractors may absorb extra tasks, materials, or labour under pressure from the prime contractor. Unchecked scope creep directly erodes project margins and can trigger disputes over change orders.

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