Weaponize Your Vocabulary
Most contractors lose money because they use generic bookkeeping terms for a trade-specific business. This isn't just a list of words—it is a Diagnostic Manual for the remodeling industry.
The Vocabulary of Profit
The difference between "Markup" and "Margin" is often 3-5% of your net income. When you confuse these terms, you aren't just making a terminology mistake—you are making a Pricing Failure. Use this dictionary to ensure your team, your bookkeeper, and your bank are speaking the same language of wealth.
Category 1: Pricing & Margin Strategy
The math behind your wealth. If you win here, you win the business.
Gross Margin
Net Profit
Run Diagnostic →Overhead
Run Diagnostic →Markup
Category 2: The Cost Layers
Identifying where profit leaks before it's too late.
Labor Burden
Run Diagnostic →Direct Cost
Hard Cost
Soft Cost
Actual Cost (AC)
Estimated Cost
Variance
Category 3: Operations & Cash Flow
Keeping the company alive while the work is being done.
Job Costing
Run Diagnostic →Work-in-Progress (WIP)
Retainage
Draw Schedule
Progress Payment
Payment Bond
Lien Waiver
Change Order (CO)
Master Construction Glossary
The comprehensive reference for terms that should be in your vocabulary—but not your standalone strategy.
Accounts Payable
Accounts Receivable
Accrual vs Cash Accounting
Actual Cost
Addendum
AIA Billing
Allowance
As-Built Drawings
Back Charge
Bid Bond
Budget at Completion
Certificate of Insurance
Change of Scope
Change Order
Conditional Lien Waiver
Constructive Change
Contingency
Cost-Plus
Critical Path Method
Daily Log
Differing Site Conditions
Direct Cost
Draw Schedule
Earned Value
Errors & Omissions
Escalation Clause
Estimate at Completion
Estimated Cost
Fixed-Price
General Conditions
General Contractor
General Liability
General Requirements
Gross Margin
Hard Cost
Indemnification
Invitation to Bid
Job Costing
Joint Check Agreement
Labor Burden
Labor Productivity
Lien Subordination
Lien Waiver
Liquidated Damages
Low Bidder
Markup
Mechanic's Lien
Net Profit
Notice to Proceed
Overhead
Owner's Representative
Payment Bond
Performance Bond
Planned Value
Prequalification
Production Rate
Progress Payment
Punch List
Purchase Order
Request for Information
Request for Proposal
Request for Quote
Responsible Bidder
Responsive Bidder
Retainage
Retainage Release
Schedule of Values
Scope Creep
Shop Drawings
Soft Cost
Subcontractor
Submittal
Substantial Completion
Surety
Time & Materials
Time Card
Unconditional Lien Waiver
Unforeseen Conditions
Unit-Price
Variance
Work-in-Progress
Workers' Compensation
Stop Guessing. Build Your Scoreboard.
The "Fake Profit Trap" is avoidable. Once you speak the language of profit, you can start building the financial defense your business deserves.