How Should Change Orders Be Tracked?

Change orders are a leading source of margin leak in construction. Work performed without documented, approved change orders is work you may never collect.

What to Capture

• Description and reason for the change
• Estimated cost and revised contract value
• Approval status — who signed off and when
• Billing status — billed, paid, or pending
• Cost-to-date versus the change order budget

Best Practices

• Document before you build — get approval in writing
• Update the project budget so reports stay accurate
• Bill change orders promptly rather than holding them to closeout
• Review open change orders in every project meeting

Why It Matters

Untracked changes distort job cost, hide margin problems, and create disputes at completion. A disciplined change order process protects cash, margin, and client relationships.