Glossary
33 terms from the paperwork of getting paid, defined in plain English. Each entry says which trades it comes up in. Definitions are general information, not advice.
1
- 1099 contractors vs W-2 employees
- Two tax classifications for the people who do your work, with different payroll timing and legal tests.
A
- Accessorial charges
- Extra charges for services beyond the basic haul, such as detention or extra stops.
- Accounts receivable aging
- A list of unpaid invoices grouped by how long they have been outstanding.
- ACH
- Electronic bank-to-bank payments through the Automated Clearing House network.
- Assignment of claims
- The process that lets a federal contractor direct contract payments to a lender or financing institution.
B
- Bill of lading
- The shipping document that proves what was picked up and delivered, and usually starts the payment clock.
- Bonding (payment and performance bonds)
- Surety guarantees that a contractor will complete the work and pay its subs and suppliers.
C
- CAGE code
- A five-character identifier for a facility, assigned by the Defense Logistics Agency.
- Change order
- A written, signed modification to a contract's scope, price or schedule.
D
- Days sales outstanding (DSO)
- The average number of days it takes to collect payment after a sale.
- Detention
- Pay for time a truck waits at a shipper or receiver beyond the agreed free time.
F
- Factoring
- Selling an invoice to a third party for most of its value now, with the balance paid when the customer pays.
- Float
- The money you front between paying for the work and getting paid for it.
- Fuel surcharge
- An adjustment added to the freight rate to pass fuel price changes through to the customer.
L
- Lien waiver
- A document giving up lien or bond rights for a period or a project in exchange for payment.
- Line of credit
- A revolving borrowing limit you draw on as needed and repay as cash comes in.
M
- Mechanics lien
- A legal claim against a property for unpaid work or materials that improved it.
- Merchant cash advance
- Funding structured as a purchase of future receivables, repaid through fixed or percentage-based remittances.
N
- Net 30, net 60
- Payment is due a stated number of days after the invoice date or receipt.
P
- Pay application
- The periodic request for payment on a construction contract, showing work complete to date.
- Pay-when-paid and pay-if-paid
- Subcontract clauses that tie the sub's payment to the prime being paid by the owner.
- Personal guarantee
- The owner's personal promise to repay business financing if the business cannot.
- Progress billing
- Invoicing in stages as work is completed rather than once at the end.
- Prompt payment laws
- Statutes that set deadlines for paying contractors and subcontractors, with interest for late payment.
- Proper invoice
- An invoice that contains everything the contract and payment rules require, which is what starts the government's payment clock.
Q
- Quick pay
- A customer or broker paying early in exchange for a discount off the invoice.
R
- Rate confirmation
- The one-page contract between a carrier and a broker for a specific load.
- Recourse
- Who absorbs the loss if a factored invoice is never paid.
- Retainage
- A share of each progress payment held back until the job, or your part of it, is complete.
S
- SAM.gov
- The federal registry an entity must be active in to bid on and be paid under most federal contracts.
- Schedule of values
- The line-item breakdown of a contract sum that every pay application is billed against.
U
- Unique Entity ID (UEI)
- The twelve-character identifier the federal government assigns to an entity in SAM.gov.
W
- Working capital
- The cash and near-cash a business has available to run day to day.