Percent complete or unit price: the billing decision you only make once

Most subs treat this as an accounting detail. It is not. It is the decision that determines what you have to prove, every month, for the length of the job — and you make it once, in the twenty minutes you spend building the schedule of values, usually before anybody has thought about it.

Get it wrong and every draw becomes an argument. Get it right and the monthly conversation is a count.

If you have not built the SOV yet, start with how to structure one that bills clean. This article is about the one choice inside it that people tend to make by accident.

What the two actually are

Percent complete billing. The line carries a lump-sum scheduled value. Every month you state what proportion of that line is installed, and you bill that proportion of the value, less what you have already billed. A $180,000 line at 40% this month and 25% last month bills $27,000.

Unit price billing. The line carries a quantity and an agreed rate. Every month you bill the quantity you installed at that rate. 4,200 square feet of slab at $6.80 bills $28,560, and the arithmetic is not open to interpretation.

They look like two ways of writing the same number. They are two different burdens of proof.

The real difference is what you have to prove

Under percent complete you are proving a judgment. Nobody can walk a line and verify that it is 62% rather than 55%. So the number becomes a negotiation, and the GC’s PM has every incentive to round down — not out of malice, but because their own roll-up is under pressure too. You lose a little every month, and you lose it quietly.

Under unit price you are proving a count. The argument does not disappear; it moves. It moves to two much better places: how the quantity was measured, and what counts as one unit. Those are questions with answers. A measurement can be walked, recorded and agreed. A percentage cannot.

That is the whole case for unit price wherever your work is genuinely countable, and it is a strong one. The monthly conversation stops being about your credibility.

Where the quantity risk sits, which nobody tells you

Unit price has a second half that matters more than the billing mechanics, and it lives in the subcontract rather than the SOV.

• Measured quantity. You are paid for what you actually install. If the slab grew, you bill the bigger number. Overruns are recoverable, provided you measured and documented them as you went.
• Plan quantity, fixed. The quantity is locked to the drawings at bid. Install more and the overrun is yours, with a change order as the only route back.

Those two read almost identically in a contract and behave in opposite directions. Before you agree to a unit rate, find out which one you signed — because a unit price on a fixed plan quantity is a lump sum wearing a disguise, and a lump sum with no float in it.

The second contract question: what is the basis of measurement? Square feet of wall at centerline or at finished face. Linear feet of pipe including or excluding fittings. Tons of steel by shipping weight or by erected piece. Agree it in writing before the first draw, because the month you disagree about it, the work is already covered up.

Which fits which trade

Most commercial SOVs are mixed, and that is correct. The useful question is not which method the job uses — it is which method each line should use.

Work that is naturally countable, and bills better by unit:

• Concrete: cubic yards placed, square feet of slab, linear feet of curb.
• Flooring: square feet by material and by level — broadloom, LVT, tile and sealed concrete each on their own line.
• Painting: square feet of wall by level, with doors and frames by count rather than by area.
• Fire sprinkler: heads by count per floor, mains and branch by linear foot.
• Structural steel: tons erected, or pieces set, by sequence.
• Drywall: board hung and finished by square foot per area.

Work that resists counting, and belongs in a lump-sum line:

• Electrical distribution. Switchgear, transformers and panels arrive and get set. There is no sensible partial unit, so a gear line is a delivery-and-set milestone rather than a quantity.
• Mechanical equipment. Rooftop units, chillers, air handlers — same logic, by unit delivered and set.
• Controls, commissioning and test-and-balance. Effort with no installed quantity behind it.
• Specialty assemblies. Fire- and sound-rated shaft wall, lead-lined partitions, curved soffits. The square-foot rate on these bears no relationship to a flat-wall rate, so putting them in the same unit line hides a loss.
• Mobilisation, layout, coordination drawings, as-builts. Real cost, no units.

A mechanical SOV with equipment lump-sum by unit set, ductwork by pound, piping by linear foot and controls lump-sum is not a messy SOV. It is an accurate one.

The five places the choice shows up

1. The monthly progress conversation. Covered above, and it is the big one.
2. Stored materials. This catches unit-price lines hard. If the line pays on installed quantity, forty tons of duct sitting in a trailer has nowhere to go. You need a stored-materials treatment on the line, agreed up front, or you float your supplier out of your own cash.
3. Change orders. Unit price is far easier here: same agreed rate, new quantity, nothing to renegotiate. Percent complete needs a new line with a new value every time, which is part of why the change order process runs slower on lump-sum jobs.
4. Retainage. Identical either way — held as a percentage of what is billed. The method changes nothing about when it comes back.
5. Closeout. Unit price ends with a final quantity reconciliation, which can go either way and is worth preparing for. Percent complete ends when every line reaches 100%, which is simpler but gives you no mechanism to recover an overrun.

The three ways subs lose money on this

Front-loading a percent complete line. Billing 80% of a line that is 50% installed feels like good cash management in month two. In month seven you are 95% complete with three months of work left, funding the job out of your own working capital while the GC has every reason to hold firm. It is one of the most common self-inflicted cash problems in subcontract billing.

Lines too big to measure. One $400,000 line for electrical rough-in on a fourteen-month job means every draw is one argument about one percentage. Split it by floor, by area, by phase — whatever matches the order your crews actually finish in. Granularity is the cheapest protection available, and it costs you twenty minutes once.

Unit rates with no agreed basis. Covered above, and it produces the ugliest disputes, because by the time anyone checks, the quantity is behind drywall.

The decision rule

Short version, line by line:

• Can a person walk it and count it, in a unit you and the GC would both name the same way? Unit price.
• Is it a delivery, a set, an effort, or a specialty assembly whose rate differs from everything around it? Lump sum, billed percent complete.
• Is it big enough that one percentage covers more than about a month of work? Split it, whichever method you chose.

How SubMark handles it

SubMark holds the structure rather than the argument:

• One schedule of values per job, built line by line. Your trade pack opens the builder with that trade’s own breakdown already in it, as percentages of the contract value you enter, so you are editing a starting point instead of staring at a blank grid.
• Percent complete and stored materials tracked on every line of each draw — which is what makes the stored-materials problem above survivable on a unit-priced job.
• It locks when the first draw is submitted, not at contract execution. You get the whole first billing cycle to fix a line that came out of the estimate wrong, and after that the basis of billing stops moving under you.
• Approved change orders are added to the SOV automatically, so a new quantity or a new line becomes billable without anyone remembering to add it.
• Retainage tracked per draw, with amount drawn minus retainage as the check amount, and a draws report you can filter by job.
• Job costing reads the same job, so budget versus actual sits next to what you have billed. On a unit-price line that is the only place you will see a rate going underwater while you can still do something about it.

An honest limit: SubMark records progress as percent complete on each line. Its takeoff feeds estimates and proposals, not draws — the schedule of values has no quantity or unit-rate field, and it will not do your monthly measurement for you. On unit-price work the practical move is to make the line granular enough that percent complete and quantity installed are the same statement — 4,200 of 10,000 square feet is 42% of that line — and to keep the measurement record itself in the daily logs, where it is dated and photographed.

More on the structure is on the schedule of values page, and the deadlines and the drawn-certified-received chain are on draw tracking. The trade where this choice is sharpest is earthwork, where every line is a quantity somebody surveyed: excavation and sitework. Office staff are what you pay for; field users and the subs you invite are free and unlimited — see how pricing works.

Before the first draw goes out

1. Read the subcontract for measured versus plan quantity on every unit-priced line.
2. Get the basis of measurement in writing, per unit type.
3. Check that no line covers more than about a month of work. Split the ones that do.
4. Put specialty assemblies on their own lines, at their own rates.
5. Agree the stored-materials treatment before you need it.
6. Do not front-load. The month it feels clever is the month you start borrowing from yourself.

The method is not what wins. The structure is. Pick the method line by line, keep the lines small enough to prove, and billing week becomes arithmetic.