Fixed-Price Contract

A contract where a subcontractor processes or treats a client's raw material using your equipment or facility, without taking ownership of it. You charge a fee for the service rather than buying and reselling the material. Common in midstream and processing work, it directly affects how you invoice and recognise revenue.

A lump-sum payment made to a subcontractor to settle or terminate a contract early. It compensates for remaining work, mobilisation costs, or lost profit margins. Subcontractors should verify buyout terms are clearly written into their agreements before signing.

A freight rate applied when a shipment fills an entire truck, typically offering lower per-unit costs than partial loads. Subcontractors hauling equipment or materials to remote sites often negotiate FTL rates to reduce logistics costs. Consolidating loads before mobilisation helps field teams maximise savings under this pricing model.

A specific, billable unit of work or material listed in a contract that triggers payment when completed. Each pay item has a defined scope, unit of measure, and agreed price. Subcontractors invoice against pay items to document and collect earned revenue.

An accounting category tracking costs for projects not yet complete or placed into service. For subcontractors, your invoiced work may sit in a client's CWIP account until project completion. This can affect payment timing and how clients prioritise approving your billings.

Revenue that is earned but never collected due to operational inefficiencies. Common causes include lost field tickets, unbilled equipment hours, forgotten third-party charges, and documentation errors. Industry estimates suggest 1-5% of revenue is lost to leakage in paper-based operations.

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