Allowance
An allowance is a budget placeholder for a selection the client has not made yet: lighting fixtures, tile, countertops, appliances. The bid carries a stated dollar amount; the final cost trues up against the actual selection.
Allowances go wrong when they are set low to make a bid look competitive. The lowball allowance wins the job, then every real selection becomes an overage and the relationship sours line by line.
What does an honest allowance look like?
Stated per item, sized from real current prices for the grade the client actually wants, and reconciled in writing when the selection is made. On the bid document, allowances belong in their own named section so the client can see exactly which parts of the price are fixed and which float with their choices.
Price your next job from the same cost data these figures come from, adjusted for where the job is. You set your markup and approve every line before you bid.
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