How to Handle change orders

Poor change order management is a leading cause of project delays, cost overruns, and payment disputes in construction. When change orders aren't documented properly, contractors risk eating costs for extra work or facing legal disputes over scope creep. A systematic approach to how to handle change orders ensures that every modification is priced accurately, approved in writing, and tracked against the original contract.

Effective change order handling also protects client relationships. Clear documentation and transparent pricing build trust, while rushed or informal changes create confusion about what was agreed upon. For builders managing multiple projects simultaneously, standardized change order processes prevent small oversights from becoming major financial problems. The difference between profitable projects and money-losers often comes down to capturing and billing for every approved change.

Here's the proven workflow for managing change orders on construction projects:

1. Document the requested change: Record exactly what the client or architect is requesting, including specifications, materials, and scope. Take photos of existing conditions if relevant.
2. Assess impact: Calculate how the change affects labor hours, material costs, subcontractor pricing, and project timeline. Include markup for overhead and profit.
3. Create a formal change order: Prepare a written document with the description, cost breakdown, schedule impact, and new contract total. Use a numbered system to track multiple changes.
4. Get written approval: Obtain signatures from the client before starting work. Never proceed on verbal agreements alone.
5. Update project documents: Revise schedules, budgets, and plans to reflect the approved change. Communicate updates to subcontractors and suppliers.
6. Track and bill: Monitor costs against the change order estimate and include the approved amount in your next payment application.

BuildTrack streamlines the entire change order workflow within your construction management platform. Create professional change orders in minutes using customizable templates that automatically pull in project details, client information, and cost codes. The software calculates markup percentages and updates contract values instantly, eliminating manual math errors that can cost thousands.

The approval workflow sends change orders directly to clients via email or the client portal, where they can review and sign electronically from any device. You'll get instant notifications when changes are approved, and BuildTrack automatically updates your project budget, schedule, and payment applications. All change order history is stored with the project file, creating a complete audit trail for billing and dispute resolution. For teams managing dozens of projects, BuildTrack's dashboard shows pending change orders across your entire portfolio, so nothing falls through the cracks.