When you create an allowance in Clearstory, you'll choose one of three types using a radio button in the Create Allowance modal. Each type works identically in the system they function as categories used for reporting, organization, and clarity when reviewing the Allowance Log.
Here's how each type is typically used on a construction project:
Allowance
A budget line item for known scope and unknown cost. Costs against these budget line items often require some level of review or approval with the customer. Unused funds are typically returned to the customer.
Example: “Paint Touchups – $10,000” with the exact labor and material TBD.
Contingency
A budget line item for unknown scope, unknown cost. Used for unexpected items that arise during the project.
Example: "Design Contingency — $100,000" for changes due to items missed in design.
Hold
A line item reserved for known scope, unknown cost, but managed at your company's discretion and risk — not the customer's. Unused funds are typically retained by your company, and any overages are also covered by your company.
Example: "Winter Conditions — $50,000" where the exact labor, materials, and equipment are TBD.
Which type should I use?
If you're not sure, Allowance is the most common starting point for scope that's tied to a customer contract. Use Contingency when the cost exposure is unknown and could come from anywhere. Use Hold when your company is carrying the risk internally and the customer doesn't need visibility.
Note: You can always change your allowance type by editing your allowance
All three types can be created as Customer, Internal, or Contractor allowances — the type and the perspective are separate settings in the create modal.
Not sure which perspective to use? See Customer, Internal, and Contractor Allowances