Glossary

The words, defined plainly.

Paving, contract and job-costing terms — with a note on why each one actually matters to your margin.

24 terms

8/40 overtime: An overtime rule requiring premium pay after 8 hours in a day or 40 hours in a week, whichever produces more.; Paving crews routinely run long days in short weeks, so daily overtime frequently applies where weekly overtime wouldn't.
Backlog: Contracted work not yet performed — the revenue you've already sold but haven't yet built.; Backlog is the earliest reliable signal of next season's capacity problem or revenue gap.
Change order: A documented modification to the contract scope, price, or schedule, agreed after the original contract is signed.; Work performed on a verbal change order is the most common way a profitable job becomes a dispute.
Cost code: A standard identifier applied to every cost so that labor, material and equipment can be grouped consistently across jobs.; Without a shared coding structure, two jobs can't be compared and historical cost can't inform a bid.
Crack fill: Sealing cracks in existing asphalt to stop water reaching the base, typically with a hot-applied rubberized material.
Estimated vs. actual: A comparison of what a job was bid to cost against what it has actually cost so far, broken down by category.; It is the single most useful number in a contracting business, and only useful while the job is still running.
Full-depth reconstruction: Removing the existing pavement and base entirely, then rebuilding the section from the subgrade up.
Gross margin: Revenue minus direct job costs, expressed as a percentage of revenue. Excludes general overhead.
Labor burden: The cost of an employee beyond their base wage — payroll taxes, workers' compensation, general liability, benefits, and paid time off.; Burden commonly adds 30–40% on top of a wage. If it isn't in your job cost, every margin you look at is overstated.
Lien waiver: A document in which a contractor or supplier waives lien rights against a property, usually exchanged for payment.
Liquid asphalt (AC): The petroleum binder in an asphalt mix. Its price moves with crude oil and is the most volatile input in a paving bid.; AC price movement between bid and build is a common and often unhedged source of margin loss.
Mill and overlay: Grinding off a specified depth of existing asphalt and paving a new surface course over the milled surface.
Mobilization: The cost of getting crew and equipment to a site and set up to work, incurred whether the job is large or small.; Under-recovered mobilization is why small jobs so often lose money on otherwise correct unit pricing.
Net margin: What remains after all costs including overhead, expressed as a percentage of revenue.
Over/under billing: The difference between what you've billed on a job and the revenue actually earned by work completed to date.
Prevailing wage: A legally mandated minimum wage and benefit rate for workers on certain publicly funded projects, set by classification.; Prevailing wage jobs need separate labor tracking and reporting — a general payroll report won't satisfy the requirement.
Progress billing: Invoicing for a portion of the contract as work is completed, rather than in a single payment at the end.; It's how a contractor funds a long job without financing the customer.
Retainage: A percentage of each payment withheld by the customer until the project is complete and accepted — commonly 5–10%.; Retainage is real money you've earned and can't spend. Tracked badly, it quietly becomes the largest receivable you have.
Schedule of values: A breakdown of the total contract price into line items, used as the basis for progress billing.
Sealcoat: A protective surface treatment applied over asphalt to slow oxidation and water intrusion. Maintenance, not structural repair.
Subgrade: The native soil beneath the aggregate base that ultimately carries the pavement load.; Most premature pavement failure is a subgrade problem, not a surface problem.
Tack coat: A thin bituminous layer sprayed between pavement lifts to bond the new course to the existing surface.
Unit price: A price per measured unit — per ton, per square foot, per linear foot — rather than a single lump sum for the job.
Work in progress (WIP): A schedule reconciling costs incurred and revenue recognised against billings on jobs still in progress.; The WIP schedule is where over- and under-billing shows up. Bonding companies and lenders read it first.

Find out where your margin is going.

The assessment scores your job costing, operations, purchasing, technology and growth readiness — and tells you what to fix first.

Take the Assessment Talk to us

Free · About 10 minutes · No obligation