Shifting your scope

By John Kenney, Cotney Consulting Group. 

Learn how to effectively manage change work orders when they become necessary on the job. 

Modifying the scope of a project can be a stressful but necessary part of many projects as unexpected scenarios pop up. The ensuing change work orders (CWOs) or additional work orders (AWOs) are key to doing this successfully but managing them to make sure that you and your team are compensated properly for any additional work can be challenging. In this article, we lay out the steps for best handling CWOs and AWOs to get your project on track and keep it within budget. 

Understanding the challenge 

Change work orders can often lead to disputes and unpaid work if not handled properly. A typical scenario involves a client requesting a change, such as installing a new sliding glass door. Without a formal change of work order, this can lead to disagreements over costs and delays in payment. 

Best practices for managing change work orders 

1 - Formalize the process 

When a client requests a change, remind them that the procedure is outlined in your contract. This step ensures transparency and sets the expectation that changes will be documented and signed before work proceeds. 

2 - Estimate and document 

Stop the job to estimate the cost of the change and write the change work order. Include all associated costs, such as delays, third-party approvals and additional labor. Get the client's signature before proceeding. If you are confident about the cost, you can write the change work order on the spot, but this approach carries risks, significantly if you underestimate the costs. 

3 - Pricing changes 

Price changes at your normal markup plus at least 10%. Smaller changes should have a higher markup to cover the additional administrative work and potential delays. 

4 - Payment terms 

Include a clear payment schedule for change work orders in your contract. Charge a fee for each change work order after a certain number of free changes to discourage unnecessary requests and compensate for the additional administrative burden. 

5 - Detailed change orders 

Each change work order should list the previous contract price, the cost of the change and the new total contract price. This transparency helps avoid disputes and ensures clients understand the financial impact of their requests. 

6 - Timely signatures 

Set a timeframe for clients to sign change orders. If there is a delay, inform them that the job will stop, which could increase costs due to potential rework or delays. 

7 - Include everything 

Even small changes should be documented with a change work order to avoid setting a precedent for free changes and to maintain clear project documentation. 

Preparing for change work orders 

Include detailed language in your contracts about handling change work orders. Specify that no changes will be made without a signed change work order and outline the process for documenting and approving changes. 

Handling change work orders effectively is essential for protecting your business and ensuring you get paid for all work performed. By formalizing the process, documenting all changes and setting clear expectations with clients, you can manage change work orders smoothly and maintain profitability. 

How Cotney Consulting can help 

Navigating the complexities of change work orders can be daunting, but you don't have to do it alone. At Cotney Consulting, we specialize in providing roofing contractors with the expertise and tools needed to manage change work orders efficiently. Our team offers personalized guidance on contract language, documentation processes and negotiation strategies to ensure you get paid for all additional work. With our support, you can streamline your operations, protect your business from potential disputes and focus on delivering high-quality roofing services. Contact Cotney Consulting today to learn how we can help you master the art of change work orders and elevate your business to new heights. 

Original article source: Cotney Consulting Group