Change orders: doing the work and actually getting paid for it

The customer asks for something extra. It is small, you are already there, and stopping to write it up feels like making a fuss over nothing. So you do it.

Repeat that across a year and it is not nothing. Unbilled extras are the purest loss available to a contractor: the cost is real, the revenue never existed, and nobody is even arguing about it because nobody noticed.

Why it happens

It is almost never dishonesty on either side. It is friction.

The ask comes mid-job, verbally, to whoever is on site. There is no natural moment to stop and document it.

It feels too small to bother with. Individually it is. Twenty of them is a month of somebody's wages.

The office never hears about it. The tech does the work, mentions it to nobody, and the invoice goes out against the original scope.

Nobody wants the conversation. Raising money mid-job feels like it damages the relationship. In practice, an invoice with unexplained extras on it at the end damages it far more.

The paper trail that fixes it

Three habits. None takes more than a minute.

Write it down before the work starts. What was asked for, what it costs, how much extra time. A photo of a note or a message thread is fine — it does not have to be a formal document.

Get some form of yes, in writing. "Yes go ahead" in a text message is a record. A verbal yes on a job site four weeks ago is not.

Get it to whoever invoices, the same day. This is where most systems fail. The change was agreed, and then the only person who knew about it moved on to the next job.

Most field service software has a change order function. The tool matters less than the rule that nothing extra happens without a record.

The one to be firm about

If the extra work is caused by something that was not there when you quoted — the wall opens up and the wiring is not what anybody expected — that is not a favour. That is a different job.

Contractors routinely absorb this because it feels like it reflects on their estimate. It does not. You quoted what was visible. The customer would have paid to have it discovered by anyone.

Stopping, documenting the condition with a photo, and pricing it is the professional response, and customers generally accept it far more readily than contractors expect.

Tracking it in the books

Two things make change orders visible instead of theoretical.

Change order value tracked against the original contract, per job. So you can see the job as quoted and the job as delivered, side by side. Jobs that consistently grow by 20% are telling you something about your estimating.

An approved-but-unbilled report, monthly. The single most valuable report here. Anything agreed and not yet invoiced, listed, while everyone still remembers the conversation. Age it and it becomes uncollectible by embarrassment.

That reporting only works if change orders reach the books at all, which is why the same-day habit above matters more than any system.

What it is worth

Once contractors start measuring this, the recovered amount is usually larger than they expected — not because any single change was significant, but because the number was never assembled before.

It also improves estimating. A job type that reliably grows in scope is a job type you are quoting wrong, and you cannot see that pattern until the extras are recorded somewhere.

Related

• Job costing for contractors
• Getting paid faster on commercial work
• Retainage explained