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Cash Flow Glossary Term

Rescheduling

Rescheduling occurs when a client moves a confirmed job to a new date, disrupting crew and equipment plans. Subcontractors should have rescheduling clauses in contracts to recover standby costs. Repeated rescheduling without compensation can seriously damage a small operator's cash flow.

Related Terms

Construction Inflation

Cash Flow

The rate at which labour, materials, and equipment costs rise over time on construction projects. For subcontractors, it can erode fixed-price contract margins if bids don't account for escalating costs. Escalation clauses in contracts help protect against unexpected cost increases during long-duration scopes.

Triple-Net Lease

Cash Flow

A property lease where the tenant pays rent plus property taxes, insurance, and maintenance costs. Subcontractors leasing yard space, shops, or staging areas often encounter this structure. Budget carefully — these added costs can significantly impact project overhead.

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.

Take-Or-Pay

Cash Flow

A contract clause requiring the client to pay for a minimum volume of services or materials, whether used or not. For subcontractors, it provides revenue protection when a project slows down or scopes are cut. Negotiate these clauses carefully to ensure your standby rates and mobilisation costs are covered.

Joint Check

Cash Flow

A payment cheque issued by a general contractor made payable to both the subcontractor and their supplier or creditor simultaneously. It ensures supplier invoices are paid directly from project funds, reducing lien risk. Subcontractors must endorse the cheque alongside the named party before cashing it.

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.

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