Contractor Terms Glossary
Every important contractor and construction term explained. From estimates to invoicing, learn the language of the trades.
A
ABN (Australian Business Number)
An Australian Business Number (ABN) is an 11-digit identifier that Australian contractors need to operate legally, invoice clients, and manage GST obligations.
Allowance
An allowance in construction is a predetermined budget amount included in a contract for specific materials or fixtures. Learn how to use allowances effectively in your estimates.
B
Bid
A formal proposal submitted by a contractor to compete for a construction project, including pricing, timeline, and scope of work.
Board Foot
A board foot is a unit of lumber measurement equal to a piece 1 inch thick, 12 inches wide, and 12 inches long, used for pricing hardwood lumber.
C
Cash Flow
The movement of money in and out of a contractor's business, tracking when payments are received from clients and when expenses are paid out.
Change Order
A change order is a written agreement that modifies the original contract terms, scope, or price of a construction project. Essential for managing project changes professionally.
CIS (Construction Industry Scheme)
The Construction Industry Scheme (CIS) is a UK tax deduction system where contractors deduct money from subcontractor payments and pass it to HMRC.
Contingency
A contingency is a budget reserve set aside to cover unexpected costs, changes, or unforeseen conditions that arise during a construction project.
Contract
A contract is a legally binding agreement between a contractor and client that outlines the scope, terms, and conditions of a construction project.
Coping
Coping is the capstone or covering material placed on top of a wall, pool edge, or parapet to protect the structure below and provide a finished appearance.
Cost-Plus Contract
A cost-plus contract is an agreement where the client pays the actual project costs plus a markup or fee for the contractor's profit and overhead.
Crew Management
The process of organizing, scheduling, and supervising construction workers and teams to ensure efficient project completion and workplace safety.
Customer Relationship Management (CRM)
Software and strategies used by contractors to manage interactions with current and potential customers, track leads, and build lasting business relationships.
Cut-in
Cut-in is a painting technique using a brush to create clean, precise edges along trim, corners, and detailed areas before or after rolling larger surfaces.
D
Digital Marketing
Online marketing strategies and tactics used by contractors to attract, engage, and convert potential customers through digital channels and platforms.
Downspout
A downspout is a vertical pipe that carries rainwater from gutters down to ground level and away from the building foundation.
Draw Schedule
A predetermined payment schedule that outlines when and how much contractors will be paid throughout a construction project.
Drop Cloth
A drop cloth is a protective covering used to shield floors, furniture, and other surfaces from paint drips, spills, and overspray during painting projects.
F
Fascia
Fascia is the horizontal board that runs along the lower edge of a roof, serving as the mounting surface for gutters and providing a finished appearance to the roofline.
Flashing
Flashing is waterproof material installed to direct water away from critical areas of a roof or building envelope, preventing water damage and leaks.
G
Gallon
A gallon is a unit of liquid measurement equal to 4 quarts or 128 fluid ounces, commonly used for paint, stains, sealers, and other liquid construction materials.
Google My Business
A free Google platform that allows contractors to manage their business information, interact with customers, and appear in local search results and Google Maps.
Gunite
Gunite is a dry concrete mixture that is pneumatically applied at high velocity, commonly used for building swimming pool shells and structural applications.
I
Inspection
An inspection is an official examination of construction work by a building inspector to verify compliance with building codes and permit requirements.
Invoice
A bill sent to clients requesting payment for completed work, materials, or services provided during a construction project.
J
J-Channel
J-channel is a siding trim piece that creates a finished edge around windows, doors, and other openings, allowing siding to terminate cleanly and professionally.
Joist
A joist is a horizontal structural member that supports floors and ceilings, typically spanning between beams, walls, or other support structures.
L
Lead Generation
The process of attracting and identifying potential clients who are interested in contracting services, turning prospects into paying customers.
Lien
A lien is a legal claim against property that allows contractors and suppliers to secure payment for work performed or materials provided.
Lien Waiver
A legal document that waives a contractor's right to file a lien against a property in exchange for payment.
Linear Foot
A linear foot is a measurement of length in a straight line, commonly used for pricing trim, lumber, pipe, and other materials sold by length.
Local SEO
Search engine optimization strategies specifically designed to help contractors appear in local search results when potential customers search for services in their area.
M
Markup
Markup is the percentage added to the cost of materials and labor to determine the selling price and ensure profitability.
Material Takeoff
A material takeoff is the process of calculating and listing all materials needed for a construction project based on plans and specifications.
Mil Thickness
Mil thickness is a measurement of paint film thickness, where one mil equals one thousandth of an inch (0.001 inches), used to specify and verify proper coating application.
O
Online Presence
The overall visibility and representation of a contractor's business across the internet, including websites, social media, directories, and review platforms.
Online Reviews
Customer feedback and ratings posted on digital platforms about a contractor's services, which significantly impact business reputation and local search rankings.
Overhead
Overhead refers to ongoing business expenses that cannot be directly attributed to specific construction projects but are necessary for business operations.
Overlay
An overlay is a thin layer of new material applied over an existing surface to restore appearance, provide protection, or add functionality without full replacement.
P
Permit
A permit is official authorization from local government required before beginning most construction, renovation, or building work.
Price Book
A comprehensive catalog of materials, labor, and services with standardized pricing that contractors use to create consistent estimates and invoices quickly.
Primer
Primer is a preparatory coating applied before paint to improve adhesion, enhance durability, and ensure uniform color coverage.
Profit and Loss Statement
A financial report that summarizes a contractor's revenues, costs, and expenses during a specific period to determine overall profitability.
Progress Payment
Progress payments are partial payments made to contractors based on completed work milestones or percentage of project completion.
Project Management
The process of planning, organizing, and overseeing construction projects from start to finish to ensure they're completed on time, within budget, and to quality standards.
Punch List
A final checklist of incomplete or defective work items that need to be addressed before a construction project can be considered complete.
R
S
Scope of Work
A detailed description of all tasks, materials, and deliverables included in a construction project contract.
Snagging List
A snagging list is a detailed record of minor defects, unfinished work, and imperfections that need to be corrected before a construction project is considered complete.
Soffit
Soffit is the finished surface beneath the eaves and roof overhangs, providing ventilation and weather protection while completing the exterior appearance.
Square
A square in roofing is a unit of measurement equal to 100 square feet, commonly used for pricing roofing materials and labor.
Square Foot
A square foot is a unit of area measurement equal to 12 inches × 12 inches, commonly used in construction for pricing and material calculations.
Subcontractor
A subcontractor is a specialized contractor hired by a general contractor to perform specific portions of a construction project.
Surety Bond
A surety bond is a three-party agreement that guarantees a contractor will fulfill their contractual obligations, protecting the project owner from financial loss.
T
Time and Materials (T&M)
Time and materials is a contract method where the client pays for actual labor hours at agreed rates plus the cost of materials used on the project.
Ton
A ton is a unit of weight measurement equal to 2,000 pounds, commonly used for ordering bulk construction materials like gravel, asphalt, and concrete.
W
Warranty
A warranty is a contractor's guarantee to repair or replace defective work or materials for a specified period after project completion.
Work Order
A formal document that authorizes and describes specific work to be performed, including scope, materials, timeline, and costs for a construction project or service.
Master the Terms, Master Your Business
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