Blueprint for change

By JobTread.

Smart strategies for managing construction curveballs.

Change orders aren’t just paperwork — they’re pressure points that can tank your timeline, bloat your budget and strain client relationships if mishandled. For contractors juggling the unexpected, mastering the art of change order management isn’t optional — it’s essential. JobTread understands that in an industry where surprises are part of the job, how you handle them defines your professionalism, profitability and reputation.

What is a change order and when should it be used?

A change order is an amendment to the original contract, detailing modifications to the project scope, cost or timeline. Whether driven by client requests, unforeseen site conditions or regulatory requirements, change orders should only be issued for significant adjustments not covered in the initial contract. Understanding when a change order is necessary can prevent misunderstandings with clients and keep projects moving forward smoothly.

Key tips:

• Only use change orders for substantial changes that impact scope, price or timing.
• Make sure both your team and clients understand the difference between small adjustments and those requiring formal documentation.

How to communicate change orders to clients effectively

Transparent and prompt communication is crucial when handling change orders. The last thing a client wants is to feel blindsided by additional costs. When a change order is required, contractors should explain the reasons behind the change, discuss its impact on the budget and timeline and obtain clear client approval before moving forward.

Best practices:

• Communicate the change’s purpose, costs and effects on the schedule.
• Always secure written or digital approval to avoid disputes.
• Consider using software to provide clients with visualizations or breakdowns of the changes.

Pricing change orders: What’s fair?

One of the biggest concerns with change orders is ensuring fair pricing. Pricing should include any added costs of materials, labor, overhead and profit while remaining transparent. When pricing additional work, itemizing these costs is helpful for clients and can prevent friction by showing a clear cost structure.

Pricing tips:

• Provide an itemized cost breakdown to increase transparency.
• Review past change orders to see if your pricing is consistent and profitable.
• Use a consistent markup to avoid underpricing or overpricing.

Managing change orders in budgeting software

Using budgeting software to track change orders helps keep your project finances organized. With tools like JobTread, contractors can create separate budget groups or line items for each change order, ensuring clarity in project expenses. A clear budget structure for change orders allows for more accurate accounting and helps contractors see how the overall project cost changes over time.

Best software practices:

• Separate change orders from the original budget for clear accounting.
• Use software features to track costs and approvals for each change order.
• Generate updated financial summaries that include change orders for client reviews.

How do change orders affect project timelines?

When a change order impacts the project timeline, it’s essential to reflect that change in your schedule. Contractors should update their project schedules whenever a change order is approved, especially if it alters task dependencies or project phases. Proactively sharing timeline updates helps set realistic client expectations and ensures everyone is aligned on the adjusted completion dates.

Timeline tips:

• Adjust the project schedule for any approved change orders.
• Inform clients of timeline changes, even if they seem minor.
• Use scheduling tools that can integrate change orders seamlessly.

Documenting change orders: What’s required?

For a change order to be enforceable, documentation is critical. A typical change order should include a detailed description of the work, cost breakdown, revised project timeline and approvals. A robust documentation process protects both contractors and clients by clarifying expectations and responsibilities.

Documentation essentials:

• Keep a written record of all change orders, including cost and scope.
• Collect approvals from all necessary parties (client, subcontractors, suppliers).
• Use digital tools for easy access to documentation and approvals.

Handling client disagreements on change orders

Disagreements can arise over the necessity or cost of a change order, especially when unexpected changes occur. When disputes arise, a well-defined process for handling disagreements can reduce tension. Always keep a record of conversations, cost breakdowns and approvals and clarify expectations upfront to prevent misunderstandings.

Conflict resolution tips:

• Outline the change order dispute process in your initial contract.
• Use digital records to document client conversations and approvals.
• Focus on maintaining trust by prioritizing clear and respectful communication.

Improving client satisfaction through better change order management

Since change orders are often unavoidable, setting client expectations and communicating regularly can go a long way in maintaining satisfaction. Many clients will appreciate transparency around the costs and time associated with changes, so keeping them informed is key to a successful project.

Client satisfaction strategies:

• Schedule regular check-ins to discuss any anticipated changes.
• Provide detailed cost structures to avoid surprises.
• Show appreciation for client patience and understanding during adjustments.

Conclusion: Simplify change order management with JobTread

Effectively managing change orders requires precision, transparency and organization. The right change order management software can streamline the process, making it easier for contractors to update budgets, adjust schedules, document changes and communicate effectively with clients.

Original article and photo source: JobTread