What is Cost Plus Billing?

A Notice of Commencement (NOI) is a legal document filed by general contractors (GCs) to formally declare the start of a construction project. In addition to establishing an official record of when construction began, it also provides essential information about the project—property details, project scope, contact information for key project stakeholders, etc. In some states, it may be referred to as a Notice of Project Commencement, an Affidavit of Commencement, or a Notice of Contract. 

For subcontractors, NOCs are important because they determine when you need to file paperwork to protect your lien (and thereby, payment) rights. Once the owner or GC files an NOC, it often changes the deadlines for when you must submit preliminary notices and mechanics’ liens. These documents contain vital project information, including:

• legal property descriptions,
• owner details,
• GC information, and
• surety data.

In most states where NOCs are required, they must be posted at the job site and recorded with the county clerk’s office. Subcontractors should be aware that failing to respond properly to an NOC could result in losing their right ot file a lien if a payment issue arises.

Staying informed about documentation like NOCs is crucial for securing payment on construction projects. For more detailed information on how to protect your lien when working on projects with an NOC, visit this blog post for the complete guide and best practices. Subscribe to Siteline’s newsletter for regular updates on getting paid on time and protecting your bottom line.

A surety in construction is a company that provides financial guarantees, typically in the form of bonds, to ensure that contractors fulfill their contractual obligations. The surety acts as a third-party guarantor, promising to step in and complete the work or compensate for damages if the contractor fails to meet their commitments.

Sureties issue various types of construction bonds, including bid bonds, performance bonds, and payment bonds. These bonds protect project owners from financial loss and give them confidence that contractors can deliver on their promises. To obtain bonding, contractors must demonstrate financial stability, technical expertise, and a track record of successful project completion.

For subcontractors, working with bonded general contractors provides payment protection, but maintaining your own bonding capacity is equally important for winning larger projects. Sureties evaluate contractors based on several factors, including financial health, project experience, and accounts receivable aging. Since poor A/R management can hurt your bonding capacity and disqualify you from major projects, keeping payments flowing quickly becomes critical for more than just cash flow.

Siteline helps subcontractors maintain healthier A/R aging by streamlining billing processes, providing visibility into payment statuses, and creating automated reminders to stay on top of collections. This all positively impact bonding evaluations and keep more opportunities within reach. Learn more about Siteline.

Labor burden in the construction industry refers to the additional costs borne by a construction firm beyond direct wages paid to employees. It encapsulates all indirect expenses associated with employing a workforce such as benefits, workers compensation, insurance, PTO, retirement pensions, uniforms, training costs, and equipment among other employment related costs. An accurate understanding of labor burden is crucial for construction firms because it directly impacts bidding and project pricing efficiency. When effectively managed, it can improve a firm's profitability and long-term financial stability. Hence, Labor Burden is a key financial metric in the construction industry.