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Cash FlowGlossary Term

Geopolitical Risk Premium

An added cost built into project contracts to account for instability in regions where work is performed. For subcontractors, it affects bid pricing, insurance rates, and mobilisation costs. Clients in high-risk areas may pay elevated day rates to secure reliable field crews.

Related Terms

Adjusted Ebitda (earnings Before Interest, Taxes, Depreciation and Amortisation)

Cash Flow

A profitability measure that strips out non-cash costs and one-time charges, showing true operational earnings. For subcontractors, it reveals how much cash your field operations actually generate. Clients and lenders use it to assess your financial health before awarding contracts or extending credit.

Firm Customers

Cash Flow

Clients committed to regular, ongoing work under standing agreements or master service contracts. For subcontractors, firm customers provide predictable scheduling and steady revenue. They reduce reliance on spot work and help justify keeping crews and equipment mobilised.

Early Payment Discount

Cash Flow

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.

Lump Sum

Cash Flow

A pricing model where the contractor agrees to complete a defined scope of work for a fixed total price, regardless of actual costs incurred.

Base Load

Cash Flow

The guaranteed minimum volume of work a client commits to a subcontractor over a contract period. It provides predictable revenue and helps justify keeping crews and equipment on standby. Subcontractors use base load commitments to stabilise cash flow between project spikes.

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.

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