Construction change order best practices, examples and more

Change is inevitable. Or, more accurately, change orders are inevitable because that old saying holds especially true in construction.

Custom home contractors know the more complex a project, the more likely it will need adjustments. However, that doesn’t mean change orders need to be the bane of your existence as a builder. When managed successfully through construction change order software and other smart strategies, these can make projects more profitable and organized.

Instead of cursing every time a change order pops up, you can see it as an opportunity to bring in more money while boosting your reputation as an easy-to-work-with builder. It’s time to make change a good thing.

It doesn’t take rocket science to make it happen, either. All you have to do is put the right processes into action. It all starts with a change order.

What is a change order in construction?

A construction change order form is a document that records any modifications to the original project scope, including design, materials or labor. Change orders are a way to manage requested changes that may arise during the construction process and outline these modifications’ cost and time frame implications. They’re a formal request for a change to the original contract or agreement and they require approval from all parties involved before implementation.

Change orders can occur for various reasons, such as unforeseen site conditions, client requests, design changes or other circumstances that impact the project’s original plan. While change orders may be necessary to ensure overall project success, they can also result in added project costs, delays and disruptions if not managed effectively.

That’s why it’s crucial to have a proper change order process, including clear communication, documentation and approval procedures. Construction change order software like Buildertrend can also streamline the process and make it more efficient, saving you time and money in the long run.

Construction change order example

Let’s say you’re building a custom home for a client. During the framing stage, you discover that the original design won’t work due to structural limitations. As a result, you must modify the framing plans to ensure the project’s safety and stability. This modification would require a change order outlining the new framing plans, material costs and the time implications of the change.

The change order would then need to be approved by all parties involved, including the client, the architect and any other stakeholders before the modifications could be implemented. Once approved, the change order would become part of the original contract, and any subsequent amendments would require additional change orders.

This example highlights the importance of managing change orders effectively to avoid added costs, delays and disruptions to the project completion date. By using construction change order software like Buildertrend, you can streamline the process and ensure all parties are on the same page.

The construction change order process explained

Managing construction change orders is an essential part of any construction project, and it’s crucial to have a well-defined process in place. With the help of technology like Buildertrend, managing change orders can be more efficient and streamlined. Here are the necessary steps in the construction change order process and how Buildertrend can assist at each stage.

Start with the contract

The construction change order process begins with the original contract between the general contractor and the client. Therefore, reviewing the contract terms carefully before signing the agreement and paying particular attention to clauses related to change orders is essential. Buildertrend’s contract management feature makes reviewing and tracking contract revisions, including change orders, easier. You can also use pre-built change order templates in Buildertrend to ensure that all necessary information is included in the change order.

Review the project plan

Next, review the construction plan and specifications for scope errors, omissions or anything that’s not easily understood. With Buildertrend’s construction project management tools, you can track progress and identify potential issues early on in the project. You can also use Buildertrend’s document management feature to keep all project info in one place, ensuring everyone involved can access the latest plans and specifications as the project progresses.

Respond Promptly to Change Orders

Delaying the response to change orders can lead to additional costs and increase the amount of time spent addressing the change order. With Buildertrend’s mobile app, you can quickly create and submit change orders, reducing the time it takes to respond to them. You can also use Buildertrend’s automatic notifications to keep everyone informed of changes and ensure that all parties involved in the change order process are on the same page.

Meet with all involved parties

It’s essential to meet with the contractor and the owner to discuss the change order and agree on the cost and impact on the schedule. With Buildertrend’s scheduling tools, you can easily adjust the project schedule to accommodate the change order. You can also use Buildertrend’s Messages feature to communicate with subcontractors and inform them of any extra work needed or changes to the original scope.

Further negotiations

In some cases, negotiations may be necessary before beginning work on the change order. With Buildertrend’s reporting tools, you can easily track the status of change orders and any talks related to them. You can also use templates to create professional-looking change order proposals with all the necessary details.

Document everything

Clear documentation of the construction change order process is essential to avoid disputes and keep the project moving forward without costly delays. With our construction software, you can keep track of all contract documents, including change orders, contracts and specifications. You can also use Buildertrend’s automatic document versioning to ensure that everyone involved in the project has access to the latest version of each document.

As you can see, the construction change order management process is a critical aspect of any construction project, and with the help of technology like Buildertrend, it can be more efficient and streamlined.

By following these steps and using Buildertrend’s tools, you can ensure that your construction change order process is effective and well-documented.

8 best practices for construction change orders

Managing construction change orders can be challenging, but it doesn’t have to be. By implementing best practices, you can minimize the impact on project changes, timeline, budget and quality. Here are eight best practices for managing construction change orders effectively.

1. Communicate clearly and quickly

Bad news doesn’t get better the longer you sit on it. It spoils. Procrastination is not your friend when it comes to change orders.

Custom home contractors too often wait to communicate unforeseen costs until the final bill.  At that point, you’ll catch clients off guard, upset them, and you might even end up eating the costs yourself to save the relationship. That’s a lose-lose.

Be bold with billing. Communicate as changes occur so there are no surprises at the end for homeowners. Be sure to keep your project team in the loop, too. With construction change order software, automated notifications can be sent as changes happen. As a result, you’ll never get stuck on the phone repeating the same conversation repeatedly.

2. Get a signature and document everything

Before you break out the sledgehammers, get your clients’ sign-off. This ties right to our last point and acts as a deeper layer of communication.

The last thing you want is to put your word against theirs. You avoid an “I said tan, not sand!” argument by recording all changes and client approval. Every change order should be organized and documented while detailing the scope of work and total costs.

Construction change order software like Buildertrend makes it easy. This leading tech platform allows your construction company to bypass face-to-face meetings and collect signatures electronically. Log in, send the change order, collect a signature and return to work.

Click. Click. Click. It’s that easy.

3. Make the process clear from the start

You might not know what alterations are lurking ahead, but you know change orders are a part of almost every project’s life. Since you can’t beat ‘em, embrace ‘em.

Be proactive and prepared for change orders from the very start when you bake them into initial contracts. Specify how they will be initiated and carried out and how they can result in delays or cost overruns. Get your lawyer to help with this one. You’ll want to be as transparent as possible.

This is important for two reasons: First, it protects your business, plain and simple. Second, it sets client expectations and clearly defines your change order workflow.

Remember that change orders are commonplace to you but a foreign concept to new homeowners. Show them previous examples. Walk through the process. Leave no questions unanswered.

4. Speed things up with construction software

Here’s a fun fact about the power of construction change order software: Change order requests are approved 33% quicker in Buildertrend.

Our Change Order tool makes all the difference. This stat compares builders in our system who use this feature versus those who don’t.

From a cell phone or computer, you can create and deliver change orders from the office or on the go and capture electronic signatures and instant payments from clients online. Everything is documented, organized and streamlined, so your team always collects on change. You won’t miss a thing – or a beat.

5. Set clear expectations

Let clients know from the start that change orders are a normal part of construction projects and may result in added costs or delays. Specify how change orders will be carried out in the initial contract, and provide examples and a clear explanation of the change order process.

This will help level set expectations and prevent misunderstandings later on.

6. Carefully calculate potential costs

When it comes to change orders, it’s important to carefully calculate potential costs to avoid surprises. Start by determining the scope of construction work involved in the change order and what materials or resources will be needed. From there, calculate the labor costs and any additional fees or expenses that may arise.

You should also communicate these potential costs clearly with your clients, so they understand the impact of the change order on their budget. With the help of construction software like Buildertrend, you can easily track the costs associated with change orders and provide accurate estimates to your clients. You can build trust with your clients and avoid disputes or disagreements by being transparent and upfront about potential costs.

7. Get everything in writing

It may seem obvious, but it’s worth repeating: Get everything in writing. Every detail of the change order should be documented in writing, including the scope of work, costs and timeline adjustments. Ensure both parties sign off on the change order and keep a copy for your records.

Having a written record of the change order helps prevent misunderstandings and disputes. It also provides a clear reference point for the future in case any questions or issues arise. You won’t want to rely on verbal agreements alone, as they can easily be forgotten or misremembered. In addition, having everything in writing can provide legal protection for both parties if any issues arise.

By following these steps and using construction management software like Buildertrend, you can ensure that change orders are handled efficiently and effectively. With clear communication, detailed documentation and a streamlined process, you can keep your construction projects on track and your clients happy.

8. Track changes in real-time

Tracking change orders in real-time is crucial for managing them effectively. Once a change order is approved, it should be entered into your construction management software and tracked throughout the project. This allows you to see how the change order impacts the project’s timeline and budget and make any necessary adjustments.

Also, with real-time tracking, you can quickly identify any potential issues or delays arising from the change order and take corrective action before they become significant problems.

Construction management software like Buildertrend tracks change orders in real-time and instantly updates you and your team. You can monitor change orders from anywhere, anytime, and ensure all team members can access the latest information. Real-time tracking helps you stay on top of change orders and avoid surprises that could impact your project’s success.

To get started with Buildertrend, demo the leading construction software now.

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Construction change order FAQs

Get answers to the most common construction change order questions.