The money words, in plain English.
Net 30, a credit note, markup vs. margin. These terms show up in client emails and quotes. Each one has a short definition and a real example.
First contact
Quoting
Quote vs. Estimate
A quote is a fixed price you commit to.
Scope of Work
The scope of work is the written list of what you will do on a job.
Change Order (Variation)
A change order is a written record that the job grew past the original quote, with the new price.
Markup vs. Margin
Markup is the percentage you add to your cost to get the selling price.
Overhead
Overhead is what it costs to be in business, even on a day you do no work.
Call-Out Fee
A call-out fee is a flat charge for showing up.
Fixed Price vs. Time and Materials
A fixed price is one total for the whole job, agreed before work starts.
Quote Validity
Quote validity is the date after which a quoted price no longer applies.
Client-Supplied Materials
Client-supplied materials are parts the client buys themselves, outside your quote.
Lead Time
Lead time is how long a material takes to arrive after you order it.
Provisional Sum
A provisional sum is a placeholder figure for materials you cannot price yet.
Free Estimate
A free estimate is a quote visit you give at no charge, because winning the job pays you back.
Diagnostic Visit
A diagnostic visit is a paid visit to find out what is wrong.
Out-of-Hours Rate
An out-of-hours rate is a stated premium on jobs outside your normal hours.
Pipeline
Your pipeline is the total value of every quote you sent that has no decision yet.
Win Rate
Win rate is the share of the quotes you send that turn into jobs.
Stale Quote
A stale quote has passed its validity date but is still open.
Scope Creep
Scope creep is a job growing past the quote, one small request at a time, with no extra charge agreed.
Subcontractor
A subcontractor is a trade you pay to do part of a job.
Labour Only
Labour only means you pay a subcontractor for their work alone.
Pay When Paid
Pay when paid means you pay a subcontractor only after the client pays you for that work.
Spend Per Mile
Cost per mile is what your van costs to run in a year, divided by the miles it covers.
Working Radius
A working radius is the distance worth traveling for a job.
Invoicing
Pro Forma Invoice
A pro forma invoice is a preview of what a client will owe, sent before the real invoice.
Invoice vs. Receipt
An invoice is a request for payment.
Credit Note
A credit note reduces or cancels what a client owes on one invoice.
Void Invoice
Voiding an invoice marks it cancelled while its number and record stay in place.
Deposit vs. Retainer
A deposit is an upfront part-payment for one job.
Progress Invoice
A progress invoice bills part of a bigger job at a milestone, such as a finished phase.
Line Item
A line item is one row on a quote or invoice.
Recurring Invoice
A recurring invoice is a template that creates and sends an invoice on a set schedule.
Purchase Order (PO Number)
A purchase order is a business’s own reference number for work it has approved.
Getting paid
Overpayment
An overpayment is money a client pays beyond the invoice, such as a mistyped transfer or a double payment.
Net 30 (Payment Terms)
Net 30 means payment is due 30 days after the invoice date.
Due on Receipt
Due on receipt means payment is expected when the client gets the invoice.
Late Payment Fee
A late payment fee is an extra charge added after an invoice passes its due date.
Part Payment
A part payment is any amount a client pays toward an invoice that is less than the full balance.
Remittance Advice
Remittance advice is a short note from a client that says which invoice a payment covers.
Bad Debt
Bad debt is money you are owed but have decided you will realistically never collect.
Retention (Retainage)
Retention is part of a job’s price, often about five percent, that a client holds back.
Merchant Fee
A merchant fee is what a card processor charges you to accept a card payment.
Card Surcharge
A card surcharge is an extra amount added when a client pays by card, to cover the merchant fee.
Payment Link
A payment link is a web address on an invoice that lets a client pay by card on their own.
Cleared Funds
Cleared funds are money that has settled in your account and can no longer be reversed.
Statement of Account
A statement of account is a summary you send a client that lists several jobs or invoices.
Staying organized
Key-Holding
Key-holding is keeping a spare key or an access code for a client’s home between visits.
Cash Flow
Cash flow is the timing of money moving in and out of your business.
Accounts Receivable
Accounts receivable is the total of every invoice you have sent that is still unpaid.
Aged Receivables
Aged receivables sorts what you are owed by how overdue it is.
Profit vs. Revenue
Revenue is everything you billed, before any costs.
Reconciliation
Reconciliation is checking your invoice records against your bank statement.
Break-Even
Break-even is the point where your revenue exactly covers your costs, with no profit and no loss.
Work in Progress (WIP)
Work in progress is a job you have finished or part finished that has no invoice yet.
Billing Cycle
A billing cycle is how often you send an invoice: per job, weekly, or monthly.
Force Majeure
Force majeure is a delay caused by something outside your control, such as weather or a late part.
Goodwill Gesture
A goodwill gesture is something small you offer after your own delay.
Seasonality
Seasonality is the yearly shape of your demand, with busy and quiet months that repeat.
Cash Reserve
A cash reserve is money set aside to pay your fixed costs through a quiet stretch you expect.
Maintenance Contract
A maintenance contract is a standing agreement to do planned work for a client at a set interval.
Billable Weeks
Billable weeks are the weeks in a year that you invoice.
Annual Shutdown
An annual shutdown is a block of weeks with no bookings, such as a holiday or a family break.
Cover Arrangement
A cover arrangement is another trade agreeing to take an emergency call for you during a break.
Response Time
Response time is the promise of how fast you reply to a call or message.
On-Call
On-call means you are reachable outside your stated working hours.
Non-Billable Time
Non-billable time is every hour that goes into the business but never reaches an invoice.
After the job
Repeat Rate
Repeat rate is the share of your clients who hire you again.
Client Lifetime Value
Client lifetime value is the total a client is likely to spend with you over the whole relationship.
Referral
A referral is a new client who came because an existing client recommended you.
Workmanship Guarantee
A workmanship guarantee is a promise that your own labor will hold up for a set period after the job.
Callback (Return Visit)
A callback is a second visit to a finished job, usually because the client reports a fault.
Snag List
A snag list is a written list of small defects found at the end of a job.
Sign-Off
Sign-off is the client agreeing in writing that a finished job matches what was asked for.
Handover
Handover is the moment a finished job passes to the client at the end of the work.
Practical Completion
Practical completion is the point where a job is finished enough to hand over and use.
Public Reply
A public reply is the reply you post directly under a review, for anyone who reads it later.
Review Gating
Review gating is contacting only the clients you expect to praise you and skipping the rest.
Fake Review
A fake review comes from someone who was never your client.
What It Takes to Serve a Client
Cost to serve is everything a client costs you beyond the job price.
Effective Hourly Rate
Effective hourly rate is what you earned per hour once you count every hour, including unbilled ones.
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