Handbook / The money
Change orders
The most valuable document on a job, and the easiest one to lose money on.
A change order is priced work that was not in the contract. It carries a reason - client request, field condition, design change, code requirement, weather - because the reason determines who pays and how the conversation goes.
It also carries a schedule impact in days. On approval those days push the completion date out, which is how a job that has had six changes stops being judged against a date that stopped being real in April.
A change order priced mid-job, with the client waiting, is where companies give work away. So a change order carries its own cost and margin, exactly as an estimate does, and the same pricing checks apply. Where no line records a cost it reports no margin rather than claiming 100% - an empty cost column is not the same as free money.
A change order
What approval actually does
- The amount joins the revised contract, so the job is measured against what it is worth today.
- The schedule days push the completion date out.
- Any material it adds reaches the materials list - ordering against the original figure would leave the crew short by exactly the change the client signed.
- It becomes available to invoice in one action.
Demolition on the Harlow job exposed live knob-and-tube in the dining room wall and again in the ceiling bay. Photographed as an issue, priced as a change order at $4,834 with three days of schedule impact, sent to Eleanor and signed. A second change added a pot filler she asked for at the plumbing walkthrough.
The contract went from $117,246 to $124,367, and the live estimate followed it.
Open change ordersUndoing things
| What happened | The way back |
|---|---|
| Priced wrong before sending | Edit it while it is a draft or pending. |
| Client approved and you need it gone | Void it. The contract comes back down and the schedule days are released. |
| Deleting an approved change order | Refused. It is part of the contract record - void it instead. |
| Approved but not yet invoiced and the scope changed again | Void it and raise a fresh one, or raise a second change for the difference. The second is usually cleaner to explain. |
Access: Financial management to price and send; the client needs only the link.