Separate agreed work from proposed changes
Use one contract schedule to distinguish the original scope, accepted changes and proposals awaiting a response. Each purchase and expense claim needs a work reference and a brief explanation of whether it is included in the fee or separately recoverable.
Preserve the customer’s approval requirements before mobilizing. The required evidence might include a purchase-order reference, attendance record or technical acceptance. Bookkeeping can identify a missing document, but only the business and customer can confirm that contractual acceptance has occurred.
Worked example: contribution and funding
A hypothetical regional support contract has $46,000 of approved fees. Labour costs $17,600, travel and lodging $6,800, subcontractors $9,200 and materials $3,400. Total direct cost is $37,000, leaving $9,000 contribution before overhead and financing.
The customer will pay a $12,000 initial invoice before mobilization, while $25,000 of direct costs fall due before the next collection. That stage needs $13,000 of additional funding. An unapproved $4,000 change request does not reduce the funding need merely because it has been submitted.
Review tax and contractor evidence by actual scope
Saskatchewan’s petroleum-service rules distinguish categories of equipment, repairs and services. A broad energy-sector description does not establish a tax result. Keep the location, equipment type, work performed and invoice breakdown so the correct classification can be confirmed.
For Saskatchewan WCB, distinguish a letter of good standing obtained before awarding work from the payment clearance sought after the work is complete. Track the required evidence with the contractor invoice and follow any hold or payment instructions rather than treating an old letter as permanent clearance.
Close the loop every reporting period
Review billed amounts, customer deductions, rejected claims and expected collection dates. Update the cost-to-complete estimate when travel plans or delivery requirements change. Document the reason for each revision so the owner can compare the original plan with the latest outlook.
The most useful report has separate columns for approved revenue, direct costs, invoicing and collections. It can show a profitable assignment with a temporary funding gap without treating that gap as a loss. The owner can then address scope, terms or funding with the relevant evidence.
Put this into practice
Sources and current guidance
A practical next step
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