Glossary

Construction terms, plain English.

The words contractors and customers use, defined the way a working contractor would say them. No jargon for jargon's sake. Linked from the help center, the blog, and pretty much every invoice email we send.

Money & billing

Allowance: A line item in an estimate set aside for a category the customer hasn't selected yet — fixtures, finishes, tile. Set at a target dollar amount; the customer upgrades or downgrades via change order based on what they actually pick.
ACH: Automated Clearing House. The US bank-to-bank transfer network. Cheaper than card payments (typically 0.8% capped at $5 vs 2.9% + 30¢) but slower (1-3 business days). Most contractors prefer ACH for invoices over $1,000.
Aging report: List of unpaid invoices grouped by how overdue they are: current, 1-30 days, 31-60 days, 61-90 days, over 90 days. The contractor's most important cash-flow document.
Change order: A written modification to the original signed contract. Adds (or subtracts) scope, cost, and time. Should be signed before the work is done, billed on the next invoice.
Deposit: Payment collected from a customer at contract signing, before work begins. Usually 10–50% of the total contract value depending on trade and job size. Funds material orders and reserves the customer's place on your schedule.
Draw schedule: A milestone-based payment plan that releases funds as a job progresses. Common on larger jobs — 10% deposit, 20% at rough-in, 30% at drywall, 30% at finish, 10% on closeout, for example.
Lien waiver: A document signed by a contractor (or sub or supplier) confirming they've been paid for work on a specific job and waiving any mechanic's lien rights. Customers ask for these before final payment.
Markup: The percentage added on top of your material cost or labor cost when quoting the customer. Industry norm: 15–25% on materials, 25–40% on labor. Covers overhead, risk, and profit.
Net 30: Payment due 30 days from the invoice date. Other common terms: Net 7, Net 14, Net 15, Due on receipt.
Progress billing: Billing a long job in stages instead of one final invoice. Each stage's invoice covers work completed in that period. Matches cash flow to actual work.
Retainage: A percentage of each payment (usually 5–10%) withheld by the customer until the job is fully complete and accepted. Common on commercial and larger residential work. Released as a separate final payment.
T&M (Time and materials): Billing model where the customer pays for actual labor hours plus material costs (with markup), as opposed to a fixed price quoted upfront. Used when scope is uncertain.

Jobs & scheduling

Punch list: The list of small final items that need to be completed before a job is considered done. Generated during the final walkthrough with the customer. Closing every item is the trigger for releasing retainage.
Scope creep: When the work the customer expects gradually grows beyond what was in the original estimate, without a formal change order. The #1 way contractors lose margin on remodel work.
Pipeline: The stages a job moves through from first call to final payment. Construction Scope's default pipeline: Lead → Estimated → Approved → Scheduled → In progress → Awaiting payment → Closed (or Lost).
Walkthrough: An in-person visit between contractor and customer to inspect work and verify it meets expectations. Done at the start (to scope the job) and at the end (to identify punch list items and close out).
Job site: A specific physical location where work is performed. One customer can have multiple job sites (e.g., a property manager with several buildings). A job site has its own address, equipment notes, and access instructions.
Pre-construction (pre-con): The planning phase before work begins — finalizing scope, ordering materials, scheduling subs, pulling permits. Often a separate phase on larger jobs with its own milestones.

People & roles

Foreman: The on-site lead for a crew. Responsible for daily progress, quality, safety, and time tracking. Reports to the GC or office manager. First person on site, last to leave.
GC (General Contractor): The contractor responsible for the entire project — managing subs, materials, schedule, and customer communication. The buck stops here.
Sub (Subcontractor): A specialty contractor hired by the GC to perform a specific scope. Electricians, plumbers, drywallers, painters, HVAC techs are commonly subbed in by GCs on bigger jobs.
Owner: The customer paying for the work. Also: the contractor business owner. Context decides which.
Trade: A specialty within construction — plumbing, electrical, drywall, roofing, etc. "What's your trade?" is asking what kind of work your business does.

Documents

Bid: The price quoted to do a specific scope of work. Usually a formal document with line items, terms, and exclusions. "Bid" and "estimate" are often used interchangeably, though some contractors use "bid" for competitive scenarios and "estimate" for non-competitive.
Approval link: A customer-facing URL where a customer can review and digitally sign an estimate, change order, or invoice. Construction Scope's standard delivery mechanism — no login required, works on a phone.
SOW (Scope of work): The formal written description of what's included in a project. The thing change orders modify.
Subcontract: A contract between the GC and a sub. Specifies scope, price, and terms for the sub's piece of the job.
W-9: IRS form a contractor provides to a customer (or a GC provides to a sub) before payment, so the payer can issue a 1099 at year-end. Required for B2B work over $600/year per the IRS.

Insurance & paperwork

COI (Certificate of Insurance): A document from a contractor's insurance company proving they have current liability and workers' comp coverage. Many customers and GCs require a COI before work begins.
Adjuster: An insurance company's representative who inspects damage and approves repair estimates. Common in roofing and restoration work where insurance pays for the repair.
Supplement: An addition to an insurance-funded job after the original adjuster estimate is approved. Used when additional damage is found during the work (rotten decking on a re-roof, for example). Filed with the adjuster and the homeowner.
Xactimate: The pricing software most insurance adjusters use to value repair work. Insurance-funded estimates are commonly formatted to match Xactimate line-item structure for faster approval.

Pricing & estimating

Allowance vs. fixed price: An allowance is a placeholder dollar amount for an undecided choice ("tile allowance $8/sq ft"). A fixed price is exact ("installation: $2,400"). Use allowances for customer-selected items; use fixed for what you control.
Cost plus: Billing model where the customer pays your actual costs plus an agreed-upon markup percentage. The customer sees your invoices and receipts. Used when scope is highly uncertain.
GMP (Guaranteed Maximum Price): A contract where the customer agrees to a maximum dollar amount, even if costs go over. The contractor absorbs cost overruns. Used on some larger commercial jobs.
Per square foot pricing: Common pricing model for drywall, flooring, painting, and roofing where the line item is a rate per square foot. The estimate calculates area once and applies the rate.
Unit pricing: Pricing model where work is broken into specific repeatable units — "$150 per outlet," "$2,400 per bathroom," etc. Used heavily by electricians and plumbers on add-on work.
Square (in roofing): 100 square feet. Roofing materials and labor are typically priced per square. A typical residential roof is 20-30 squares.