FieldNews
Subscribe

Daily oil & gas and construction news for subcontractors

Cash FlowGlossary Term

Procurement Sprawl

When a subcontractor sources materials, tools, or services through too many uncoordinated vendors. This drives up costs, creates invoice chaos, and delays field operations. Consolidating suppliers helps control spend and simplify accounts payable.

Related Terms

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.

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.

Escalation Clause

Cash Flow

A contract provision that allows your rates or pricing to increase if specific costs rise, such as fuel, labour, or materials. It protects subcontractors from absorbing unexpected cost spikes during long-term projects. Always verify trigger conditions and notice requirements before signing.

Capital Budget

Cash Flow

A client's approved spending plan for major projects, equipment, and infrastructure in a given year. When capital budgets are set or revised, subcontractors see direct impacts on contract awards and work volumes. Monitoring clients' capital budget cycles helps you time bids and resource planning effectively.

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.

Formula Programs

Cash Flow

Pricing arrangements where labour or service rates are automatically adjusted based on preset variables like fuel costs or inflation indices. Common in long-term oil and gas contracts, they reduce rate renegotiation between operators and subcontractors.

Stay sharp on field operations

Industry news and insights, delivered to your inbox.

Subscribe to FieldNews
A community project byAimsio