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Cash FlowGlossary Term

Net 30/Net 45/Net 60

Payment terms indicating when payment is due after invoice date. Net 30 means payment within 30 days. Many operators use Net 45 or Net 60, extending subcontractor cash cycles.

Related Terms

Convertible Notes

Cash Flow

Short-term loans that convert into equity if not repaid by a set date. Subcontractors may encounter these when seeking growth capital to fund equipment or crew expansion. They carry risk: lenders can become part-owners of your company.

Tax-Exempt Revenue Bonds

Cash Flow

Government-issued bonds that fund large infrastructure projects without federal tax on investor returns. For subcontractors, these bonds often finance the public projects you bid on, such as pipelines or facilities. Lower borrowing costs for project owners can mean steadier long-term contracts and more predictable payment cycles.

Core Inflation

Cash Flow

A measure of price increases that excludes volatile food and energy costs. For subcontractors, it reflects sustained rises in labour, materials, and equipment costs. Use it to justify rate adjustments in long-term service agreements.

Planning Reserve Margin

Cash Flow

A buffer of extra labour, equipment, or budget set aside to cover unexpected delays or scope changes on a project. Subcontractors use it to avoid cost overruns when field conditions shift. Typically expressed as a percentage of the total estimated project value.

Direct Connector

Cash Flow

A company that hires subcontractors directly, without a staffing agency or broker in between. This typically means faster payments and clearer communication on scope and rates. Subcontractors often secure better margins by working with direct connectors.

Quantity Drift

Cash Flow

The gradual increase or decrease in actual field quantities compared to original contract estimates. For subcontractors, untracked drift leads to unbilled work or disputed invoices at project close-out. Monitor quantities continuously to support change order claims.

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