Change Order
Definition
A change order is a written amendment to an existing contract that adjusts scope, price, or timeline after the work has started.
What Change Order Means for Your Business
What it means
A change order documents what changed, why, and how much it costs. It protects both sides when the original plan turns out to be incomplete or when the customer asks for something new mid-job.
Why it matters
Change orders are where a lot of profit lives and also where a lot of disputes start. Do not do them and you lose money. Do them poorly and you lose the relationship. Do them well and you boost margin and trust.
How contractors use it
The tech or PM writes a clear description, quotes the cost, and gets a digital signature before doing the work. Good software attaches the change order directly to the original work order and final invoice.
Real-World Example
A remodeling contractor on a $65,000 bathroom job added $12,400 in signed change orders for additional tile, a heated floor, and an upgraded vanity. That lifted gross margin on the project from 22% to 31%.
Related Terms
Work Order
A work order is the digital or paper document that authorizes and records the work performed on a specific service call.
Estimate
An estimate is a written offer of price and scope that a contractor provides to a customer before beginning any work.
Progress Billing
Progress billing is the practice of invoicing the customer in stages as work is completed on a long project, rather than waiting until the end.
Final Invoice
A final invoice is the last bill on a job, showing the total amount due after applying any deposits and progress payments already collected.
Digital Signature
A digital signature is a legally binding electronic mark a customer applies to a document on a screen, replacing a physical ink signature.
Put This Into Practice with Free Software
Kaldr Tech handles change order and everything else you need to run your shop. $0/month, 3.5% + 30¢ per transaction.