A placeholder amount inside a fixed price for something the customer has not chosen yet — the tile, the taps, the light fittings. If they pick something dearer the difference is added, and if they pick cheaper it comes off. Allowances are the usual way a fixed-price job quietly stops being fixed price, so say what the allowance buys and per what unit, not just what it is worth.
Related terms
- Scope of workThe written description of exactly what you are going to do, in enough detail that you and the customer are picturing the same job.
- ExclusionsThe list of things your price does not cover, written down on the same document as the price.
- ContingencyAn amount added to a price to cover what you cannot see yet — the rot behind the siding, the second layer of shingles, the floor that is not level.
- EstimateA price you expect the work to come to, given before anyone has committed to anything.
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