What is overhead allocation?

Accrued revenue is the income a subcontractor has earned for work performed or in progress but has not yet billed (the general contractor or client) or received payment for. This typically happens due to the nature of construction contracts, where payments are often tied to milestones or project completion.

Example: An electrical subcontractor working on a large commercial building is paid based on completed milestones, with invoices due at the end of each month. By June 30th, they've finished 75% of the $100,000 job, but can't invoice until month-end. The $75,000 earned but not yet invoiced is their accrued revenue.

Tracking accrued revenue is crucial for accurate financial reporting, as it reflects the subcontractor’s economic activity for the period—even before invoicing or receiving payment. To gain even deeper financial insights, many subcontractors turn to Siteline. Our tool is tailored to help track pay application statuses and amounts owed, empowering subcontractors to make more informed, strategic decisions. Experience the benefits firsthand by scheduling a Siteline demo today.

A unit price contract is a widely used pricing model in the construction industry where general contractors (GCs) provide a fixed price for each unit of work and material (based on the anticipated quantities specified by the client). The final contract amount is calculated by multiplying the pre-agree unit prices by the actual quantities used or work performed.

This approach allows for flexibility as the total costs adjust to reflect actual usage. Therefore, unit price contracts are ideal for projects with uncertain material and work quantities, helping avoid cost overruns due to miscalculations.

For subcontractors, there are specific considerations when working with unit price contracts. It’s crucial to ensure precise unit price calculations to maintain profitability and implement sound systems for tracking and reporting actual quantities. Clear communication with the GC about quantity changes is also important, and subcontractors should be prepared to justify any discrepancies that may occur.

Siteline—an intuitive A/R management system—simplifies unit price billing for subcontractors, allowing them to:

• Easily input and update unit prices;
• Automatically calculate billing amounts based on reported quantities; and
• Generate accurate, detailed pay applications that show up-to-date unit prices and quantities.

Ready to optimize your unit price billing process? Contact Siteline today to learn how our solution enhances A/R workflows to accelerate payments.

A quantity survey, also known as a bill of quantities (BOQ), in the construction industry is a detailed analysis and estimation of all parts, materials, and costs associated with a construction project. This process is carried out by a professional known as a quantity surveyor. The surveyor evaluates the quantities of materials needed, required labor, groundwork needed, and the overall time frame of the project. They also consider other variables to provide an accurate cost analysis, like the complexity of the project, the potential risks, and the market conditions.

The main purpose of a quantity survey is to:

• Accurately estimate the cost of a construction project: By quantifying all the required materials and resources, the quantity survey helps contractors and clients estimate the total cost of the project accurately. For subcontractors specifically, quantity surveys are used to price out the cost of their portion of the work, ensuring they quote competitively while accounting for all the necessary materials and labor.
• Facilitate bidding and tendering: The quantity survey provides a standardized format for subcontractors to prepare their bids based on the same information, ensuring fair competition during the tendering process.
• Control project costs: During the construction phase, the quantity survey serves as a reference point for monitoring and controlling costs, as actual quantities used can (and should) be compared against estimated quantities.
• Manage changes: If the original scope of work changes or varies, the quantity survey serves as a baseline for evaluating and negotiating the cost implications of those changes.

A quantity survey is essential for subcontractors to accurately estimate costs, plan resources, and manage project scope. While not directly integrated, solutions like Siteline allow subcontractors to leverage quantity survey data to streamline their billing processes.

• Subcontractors can generate payment applications in Siteline that reflect completed work items and quantities from the survey, minimizing disputes.
• Some clients use Siteline's billing and A/R reports to help quantity surveyors and estimators account for contractors with longer payment cycles. They can either increase bids for those contractors to offset delays or revise terms to penalize late payments.
• Siteline also seamlessly tracks change orders, enabling subcontractors to easily update payment applications and lien waivers when project scope changes, keeping everything documented and billed accurately.

By bridging the gap between contracted scope and actual billing, Siteline enables subcontractors to focus on execution while ensuring prompt, accurate payments. Experience the power of efficient payment management tailored for subcontractors. Schedule a demo of Siteline today.