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Pricing and estimates

How to handle change orders on the job

Updated November 13, 20265 min read

Write a change order any time the scope, price or schedule moves from what the customer signed. Put the change, the price difference, the time impact and both signatures on it, and get it signed before the extra work starts, not at the final invoice. Small adds can ride to the final bill under a clear limit; anything bigger stops the job until the customer agrees.

When you need a change order

A change order is a written amendment to the job the customer already agreed to. You need one whenever any of these move:

  • Scope: the customer asks for more ("while you are here, can you also..."), or you find something that has to be fixed before you can finish, such as rotted framing behind a shower wall.
  • Price: the work costs more or less than the signed amount.
  • Schedule: the change adds days, needs a second inspection or waits on a special-order part.

Shops lose the most money on the second kind: the hidden condition. The tech fixes it because it is the right thing to do, mentions it at the end, and the customer feels ambushed by a bill they never saw. Get it in writing first and the same work becomes a normal, paid part of the job.

What goes on a change order

  1. The original job or contract number it changes.
  2. What is changing, in plain words a homeowner understands. Add photos of the condition you found.
  3. Why: requested by the customer, or a condition found on site.
  4. The price change, up or down, and the new job total.
  5. The time change, if any, and the new finish date.
  6. How the extra will be paid: added to the final invoice, or due now.
  7. Date and signatures from the customer and your tech or project lead. An e-signature on the phone counts the same as ink in most cases and is far faster.

California's contractor board puts it plainly for homeowners: note changes in writing on a change order and include any price changes, and once a change order is signed it becomes part of the written contract. The same page says a written contract is required for home improvement projects over $500 in combined labor and materials. Other states have their own rules, so check your state's licensing board.

Get it signed before the work, not after

A change order signed after the work is a request for forgiveness. Before the work, it is a decision the customer made. The difference shows up when the invoice is questioned.

What to say when you find a hidden condition:

"Ms. Reyes, I need to show you something before I go further. When we opened the wall, the subfloor under the tub is soft. Here are the photos. I can't set the new valve on it safely. Replacing that section is $640 and adds about half a day. I've written it up here. If you're OK with it, sign and I'll keep going. If you want to think about it, I'll button it up so nothing gets worse."

Three things make that work: you stop, you show proof, and you give a price and a choice. Never start the extra and price it later.

Make it a rule: no signature, no extra work. A tech who does unsigned extras is giving away money and creating a dispute at the same time.

Small adds vs big changes

Not every extra needs the job to stop. Set a limit that fits your work, for example any add under $150 from your price book, and let small items ride to the final bill with a note. The customer still signs the final invoice that lists them.

ChangeExampleHow to handle
Small add from the price bookExtra angle stop, a new supply lineTell the customer, add it to the job, it shows on the final bill they sign
Bigger add or hidden conditionRotted subfloor, a second circuit, a longer line runStop, photos, written change order, signature before work
Off-book priceSomething you have never pricedOffice or owner approves the price, then change order
CreditCustomer drops a fixture from the scopeChange order with the price going down, signed the same way

Residential vs commercial

On residential work, the homeowner is usually standing there and can sign on your phone in a minute. Speed is the point. The habits that get estimates signed fast, covered in how to send estimates customers approve, work for change orders too.

Commercial work is slower and more formal. The contract usually says who can authorize changes, how they must be priced (often labor, material and a set markup shown separately) and how fast you must give notice. A site super saying "go ahead" may not be enough to get paid. Read the change clause before the job starts, get a written directive from the person named in the contract, and keep a log of every pending change with its status. Expect the change to be paid on a later progress bill, not right away.

A worked example

Example only, with made-up numbers. Harbor Line Plumbing is replacing a tub and shower valve for Ava Reyes, signed at $2,450. On site, Sam Rivera finds the soft subfloor ($640) and Ava asks for a second shower head ($180).

ItemAmount
Original signed job$2,450
Change order 1: subfloor section, adds half a day$640
Change order 2: second shower head and valve trim$180
New job total$3,270

Both were signed before the work, with photos attached. When the final invoice arrives at $3,270, there is nothing to argue about. Without the change orders, the same $820 is a phone call, a discount or a bad review.

How SWITCHBOARD handles this

On a Live Job in SWITCHBOARD, small Price Book additions under the shop's limits ride to the final bill, bigger ones get a signed change order on the tech's phone on the spot, and off-book prices still need approval. If the job is billed in stages, the change sits on the same job number with staged invoicing.

Questions people ask

Does a change order have to be signed?

It should be, by the customer and by you, before the extra work starts. A signed change order becomes part of the contract, which is what protects your payment.

Do I need a change order for a small add?

Set a limit. Small price book items under it can be added with the customer's verbal OK and appear on the final invoice they sign. Anything above it gets a written change order.

What if the customer will not sign the change order?

Do not do the extra work. Make the job safe, document the condition with photos, and note that the customer declined. You can finish the original scope if it can be done safely without the change.

Can a change order lower the price?

Yes. When scope is removed, write a change order with the credit so the new total is clear and signed, the same as an add.

Sources

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