What are Current Liabilities?

Underbilling refers to a scenario in the construction industry where the actual costs incurred on a project surpass the billed amount for a specific time period. Often occurring unintentionally due to unexpected cost variations, it results in a deficit situation for the contractor. It is essentially an imbalance where the contractor has delivered more work or materials than they have billed the client for. Underbilling can strain cash flow and disrupt project schedules if not addressed promptly. While this might prove beneficial to the client in the short term, contractors need to ensure that they identify and rectify underbilling to maintain project profitability and financial stability.

A lien waiver is a legal document used in the construction industry that is often exchanged between parties involved in a construction project. This waiver essentially absolves or "waives" the claimant's (typically a project participant like a contractor, subcontractor, or supplier) right to impose a lien on the property for the amount they have been paid. It's often used upon payment to ensure that the payer is protected from double payment or any encumbrances on the property related to payment disputes. There are four general types of lien waivers: conditional and unconditional, each of which can be used for progress or final payment. Each type has its own legal implications, so it's important to understand them fully before signing.

A Schedule of Values (SOV) is a detailed breakdown of a construction contract that itemizes the total contract amount into specific work categories, phases, or deliverables. It shows the dollar value assigned to each component of work that’ll be completed during a construction project. As such, the SOV is a critical component of successful project and cash flow management. It also lays the groundwork for progress billing and payment applications (like AIA® G702/G703® forms).

Here’s how it works: 

• Contractors create initial SOVs that allocate contract value across work phases.
• They maintain the SOVs to align with actual work schedules and ensure billing requests match project progress.
• SOVs get updated when changes occur on the job, altering the original scope and budget.

As you can imagine, managing multiple SOVs across projects while tracking actual costs against line items becomes complex and time-consuming.

Siteline streamlines this entire process by integrating with major construction ERPs and accounting software. Subs import project data from their ERP into Siteline, compile and send pay apps directly in the system (accounting for any change orders), and then rest easy knowing that Siteline automatically syncs approved invoices back to the ERP. 

The result? Faster billing cycles and quicker payments. Want to see how it works? Book some time with us.