Glossary

AI, construction and back-office terms, defined.

Short, plain-English definitions of the terms that come up when small businesses automate operations or audit their costs. Updated .

AI agent
Software that uses a large language model to carry out a multi-step task toward a goal, such as reading documents, deciding what to do next, and taking actions in other systems, instead of only answering a single prompt. In a business, an agent typically runs on a schedule or trigger and routes exceptions to a person. Learn more
AI receptionist
A voice or text AI system that answers calls and messages, captures the caller's details and job needs, answers common questions and books or routes the request, including after hours. Learn more
AIA G702 / G703
Standard American Institute of Architects forms used for construction progress billing. The G702 is the Application and Certificate for Payment (the summary), and the G703 is the Continuation Sheet listing each line of the schedule of values with work completed and retainage. Learn more
Auto-renewal clause
A contract term that automatically renews an agreement for another period unless one side cancels within a notice window, often with a price increase. Missing the window usually locks in another full term. Learn more
Bid leveling
Normalizing subcontractor quotes that arrive in different formats and scopes into one apples-to-apples comparison, so a general contractor can see gaps, exclusions and true price differences before awarding work. Learn more
Certified payroll
A weekly payroll report, signed under a statement of compliance, that contractors on prevailing wage projects submit to show each worker's classification, hours, rates and deductions. Federal projects commonly use Department of Labor form WH-347; many states have their own formats. Learn more
Change order
A written amendment to a construction contract that changes scope, price or schedule. Undocumented changes that live in texts and emails are a common source of disputes and unbilled work.
Davis-Bacon Act
A U.S. federal law requiring contractors and subcontractors on covered federally funded construction projects to pay laborers and mechanics at least the locally prevailing wages and fringe benefits set by the Department of Labor. Learn more
Dispatch
Assigning service jobs to technicians and scheduling them based on location, skills, availability and urgency. Dispatch software and AI agents can propose schedules and notify customers of arrival times. Learn more
Duplicate payment
Paying the same vendor invoice more than once, often caused by re-keyed invoice numbers, multiple payment channels or vendor resubmissions. Duplicates are usually recoverable as a refund or credit once identified. Learn more
Early-payment discount
A discount a vendor offers for paying before the due date, written as terms such as "2/10 net 30" (2% off if paid within 10 days, otherwise the full amount is due in 30). Learn more
Exception handling
The rules for what an automation does when an input doesn't fit the normal pattern, such as a missing document, a mismatched amount or an unclear request. Good exception handling flags the item to a named person instead of guessing or failing silently.
Experience rating
The method most states use to set an employer's unemployment tax rate based on how many former employees have collected benefits charged to its account. Uncontested or wrongly charged claims can raise the rate for several years. Learn more
Human-in-the-loop
A design in which an automated system hands certain decisions or exceptions to a person for review or approval before acting. It keeps a human accountable for high-stakes steps such as sending money, contacting a vendor or filing with an agency.
Large language model (LLM)
A type of AI model trained on large amounts of text that can read, summarize, classify and write language. Models like GPT, Claude and Gemini are LLMs. On their own they generate text; connected to tools and data, they power AI agents.
Lien waiver
A document in which a contractor, subcontractor or supplier gives up some or all of its right to file a mechanic's lien, usually in exchange for payment. Conditional and unconditional waivers, for progress and final payments, are commonly required with each draw request. Learn more
Retroactive (retro) credit
A credit from an insurance carrier for premiums billed after coverage should have ended, such as for an employee who left. Carriers usually limit how far back they will issue retro credits, so delays can cost money. Learn more
RFI (request for information)
A formal question from a contractor to the design team or owner asking for clarification of drawings, specifications or site conditions. RFIs are logged, numbered and tracked because slow answers can delay work and drive change orders. Learn more
Robotic process automation (RPA)
Software "bots" that mimic clicks and keystrokes in existing applications to complete rule-based tasks. RPA is reliable for stable, structured screens but brittle when layouts change or inputs vary, which is where AI agents tend to do better.
Shared-savings pricing
An outcome-based pricing model in which a provider is paid a share of the measured cost savings or recoveries its work produces, instead of hourly fees or a fixed retainer. It requires agreeing on a baseline before work starts. Learn more
Speed to lead
The time between a prospect's first inquiry and a business's first meaningful response. In home services, where customers often contact several companies at once, a fast response is a major factor in who wins the job. Learn more
Submittal
Shop drawings, product data, samples or other documents a contractor sends to the architect or engineer for approval before materials are ordered or work is installed. Learn more
SUTA (state unemployment tax)
The state unemployment insurance tax employers pay on a portion of each employee's wages. The rate varies by state and by employer, and is usually adjusted each year based on the employer's claims history. Learn more
Unapplied credit
A credit memo or overpayment sitting on a vendor account that was never applied to a later invoice, so the business keeps paying full price while money it is owed goes unused. Learn more
Workflow automation
Using software to move information between systems and complete repetitive steps without a person doing each one by hand. Traditional automation follows fixed rules; AI-assisted automation can also handle unstructured inputs like emails, PDFs and phone calls.
Working prototype
A functioning early version of an automation run against a business's real process and data, used to prove value before a full rollout. Tarvora builds a free working prototype for construction and home service businesses before any commitment. Learn more