Financials & Cost

Back Charge

A cost billed back to a subcontractor for work or damage that was their responsibility.

A back charge is money the general contractor deducts from a subcontractor's payment to recover a cost that sub caused — cleanup they skipped, damage to another trade's work, or a repair the GC had to make on their behalf. It's the mechanism for holding a sub accountable for their own mess.

Back charges need documentation and, ideally, advance notice: photos, a record of the issue, and a clear tie to the responsible party. Surprise back charges at the end of a job are a frequent source of disputes, so good PMs flag and paper them as they happen.

Related terms

Commitment

A subcontract or purchase order — a signed agreement committing money to a subcontractor or supplier for a defined scope.

Pay Application

A periodic invoice billing for the work completed to date, submitted against the Schedule of Values.

Punch List

The list of incomplete or deficient items a contractor must fix before the work is accepted as complete.

From term to skill

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