Glossary
Change order
Also called: CO · contract change
A change order is a written, signed amendment to a contract that changes the scope of work, the price or the schedule after the original agreement.
Hidden conditions, customer requests, design changes and code requirements all produce them. A properly documented change order states what is changing, what it costs and how it affects the schedule, and it is signed before the work is done.
In the books, approved change orders are added to the contract value; pending ones are not revenue until they are signed. Tracking the two separately shows both what you are owed and how often jobs change after they are sold.
Why it matters to a contractor
Unsigned and unbilled change orders are one of the most common reasons a job that was bid correctly still loses money. The work gets done, the cost gets incurred, and nobody sends the invoice.
Work it out on your numbers
See also