What goes on a construction change order?
A change order needs the work, the price and the time, plus both signatures.
- Job and client: who, where, and the change order number
- Description: what is added or removed, and why
- Price: labor, materials, subs and markup, or the credit
- Contract summary: original amount, approved changes, new contract amount
- Time: days added and the new completion date
- Payment terms: when the change is billed
- Signatures: client and contractor, each with a date
The form above fills every one of these from what you type.
How do you price a change order with markup?
Add up your cost for the change, then add your markup on that cost.
Price = (labor + materials + subs + equipment + other) × (1 + markup %) − credits
Labor is hours × your hourly cost. Credits for work taken out are subtracted at cost.
Example: 12 labor hours at 68 is 816. Materials are 293 and the plumber is 450, so cost is 1,559. At 20% markup the change order is 1,559 × 1.20 = 1,870.80.
What markup percentage should a change order use?
Use the markup your contract states for changes, or your own overhead and profit if it is silent.
Markup is on cost; margin is on price. Margin = markup ÷ (1 + markup).
Example: a 20% markup is a 16.7% margin, because 0.20 ÷ 1.20 = 0.167.
Tick “Show cost and markup as separate lines” when the contract asks for an open breakdown.
How do you keep a change order log in Excel?
Keep one row per change order with the number, date, description, amount, days and status, plus a running contract total.
Running total = original contract + every approved change order
Pending and rejected changes stay in the log but out of the total.
Example: a 48,500 contract with approved changes of 1,240 and 2,860 stands at 52,600. A pending 1,900 change waits until it is signed.
Download the log as CSV or copy it straight into Excel or Google Sheets. To see whether billing is keeping up with those changes, use the over/under billing calculator.
Does a change order need a signature?
Get a signature before the extra work starts, so the price and time are agreed in writing.
- Federal contracts: FAR 52.243-4 lets the contracting officer make changes by written order. The contractor must assert its right to an adjustment within 30 days of receiving it.
- Electronic signatures: under 15 U.S.C. 7001, a contract or signature can’t be denied legal effect solely because it is electronic.
- State rules vary, especially for home improvement work. Check with your state contractor board.
Questions
Is my job information uploaded anywhere?
It stays in your browser. The draft is saved only on this device so you can pick it up later.
Can I fill it in on my phone at the job?
Yes. Each line stacks on a small screen, and Print or save as PDF works from a phone browser so the client can sign on the spot.
How do I write up a credit or deductive change order?
Add a line with the type Credit, or enter a negative amount, for the work taken out. Credits come off the price at cost, with no markup.
How do I get the change into QuickBooks Online or Buildertrend?
Download the line items and add them to a new estimate or your next progress invoice. In QuickBooks Online the customer can accept an estimate from the email you send.
Sources
- FAR 52.243-4 Changes, Acquisition.gov (Federal Acquisition Regulation),
- 15 U.S.C. 7001, General rule of validity (ESIGN Act), Legal Information Institute, Cornell Law School,
- Create and send estimates in QuickBooks Online, Intuit QuickBooks,
