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Cash FlowGlossary Term

Rack and Carriage

A pricing structure where subcontractors charge a marked-up "rack" rate for materials, plus a separate fee for delivery or handling. It allows field service companies to recover supply chain costs beyond base labour rates.

Related Terms

Firm Customers

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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.

DSO (Days Sales Outstanding)

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The average number of days it takes to collect payment after a sale. For field service companies, DSO measures how long between completing work and receiving payment. Industry benchmarks range from 30-60 days.

Direct Connector

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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.

Priced Option

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A pre-negotiated scope item included in a contract at a fixed rate, which the client may activate later without rebidding. Common in turnarounds and construction projects for add-on scopes like additional inspection work or extra crews. Securing favourable rates upfront protects subcontractors from rushed low-ball pricing pressure mid-project.

Joint Venture Dispute

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A conflict between JV (Joint Venture) partners over cost-sharing, scope, or payments that can delay approvals and freeze subcontractor invoices. When JV partners disagree, field service companies often face work stoppages or withheld purchase orders. Always clarify which JV partner holds contracting authority before mobilising.

Cost-Escalation Clause

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A contract provision allowing subcontractors to adjust their rates when material, labour, or fuel costs rise beyond a set threshold. It protects field service companies from absorbing unexpected cost increases on long-term projects. Without one, subcontractors are locked into original pricing regardless of market changes.

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