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Cash Flow Glossary Term

Fuel Cost Escalator

A contract clause that adjusts your billing rate when diesel or fuel prices shift beyond a set threshold. It protects subcontractors from absorbing sudden fuel cost spikes on long-term or remote field assignments. Negotiate the trigger percentage and index reference before signing.

Related Terms

Working Capital

Cash Flow

The difference between your current assets and current liabilities — essentially the cash available to keep operations running. For subcontractors, it covers payroll, fuel, and equipment costs while awaiting client payment. Tight working capital is a common risk when payment terms stretch 60–90 days.

Wholesale Cost

Cash Flow

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.

Breakeven Cost

Cash Flow

The minimum amount a subcontractor must charge to cover all project expenses without making a loss. It includes labour, equipment, fuel, insurance, and overhead. Pricing below breakeven erodes margins and can threaten business viability.

Master Default Order

Cash Flow

A court order declaring a prime contractor in default on financial obligations, often freezing payments to subcontractors. It signals serious insolvency risk and can delay or eliminate outstanding invoices. Subcontractors should file liens immediately upon receiving notice.

Rule 144a

Cash Flow

A 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.

Cash Price

Cash Flow

A fixed, all-in rate quoted to a client that requires no further negotiation or adjustments. Subcontractors often offer a cash price to secure faster payment or simplified invoicing. It typically excludes extras like mobilisation, standby time, or material markups.

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