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Unit Price Billing
What is Unit Price Billing?
Unit Price Billing is a method used in the construction industry where costs are determined based on agreed-upon rates for specific types of work. This method means you pay for materials and labor based on the quantity used or amount of time expended. For instance, if you're building a skyscraper, payment might be determined by a set price for every square foot of construction rather than a lump sum for the entire project. Unit Price Billing allows for more flexibility as changes occur during construction, with pricing adjustments made according to altered quantities. It provides transparency and can potentially lead to cost savings if actual quantities are less than projected.
Trusted by trade contractors across the country
Other construction terms
What is a Pay-if-Paid Clause?
A Pay-if-Paid Clause is a contractual agreement prevalent in the construction industry. Generally, this clause can be found in subcontracts between the General Contractor(GC) and their subcontractors. According to the clause, the GC is not obliged to pay the subcontractors unless and until they themselves have received full payment from the project owner. Therefore, it effectively transfers the risk of the project owner's insolvency from the GC to their subcontractors. It serves as a protection for the GC against financial instability. This type of clause has its controversies, as some jurisdictions view it as unfair to subcontractors due to the assignment of financial risk.
What is a Champion?
A Champion within the construction industry is an individual who plays a critical role in spearheading and facilitating successful implementation of a project, plan, method or innovation. This individual possesses leadership qualities, and is responsible for rallying support, encouraging commitment, and bringing together teams and resources necessary for a project's success. He or she communicates the vision of the project and ensures everyone involved understands and is aligned with the mission. A Champion also works to resolve any issues that may arise, making critical decisions based on their wide range of expertise. They are crucial to the success of construction initiatives, serving as a driving force that encourages progress and ensures high-quality results.
What is an Automated Clearing House (ACH)?
An Automated Clearing House (ACH) within the construction context refers to an electronic fund transfer system primarily used for direct deposit payments, including for construction services. It's a method universally used by many businesses in the industry for its convenience and speed. This system provides an efficient platform for moving funds from one account to another in a collective and prioritised manner, aiding greatly in the financial management of a construction project, including payroll and paying suppliers. The benefits include prompt payment, less risk of cheque fraud, and streamlined bookkeeping. It's an integral part of the financial mechanism in the construction industry.
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