Change Orders Can Change Your Life | Part 3

A change order can be on a dirty McDonald’s napkin stained with ketchup?? Why yes…. yes, it can. (Or if you’re in the South and have the beloved Chick-fil-a, which is my more commonly cited fast food chain in this context, absolutely use whatever you have to get the job done).

If you’ve read our first two articles, in continuing our Change Order Life (aka “CO Life”), let’s debunk misconception #3, which is that change orders must have a certain formality or format. If you have taken any of my classes, you’ve probably heard me say that there does not have to be a particular formality to certain documents (and endorsed whipping out a dirty napkin from your vehicle to jot down a change order if needed).

If a change order reflects 1) whatever change in scope is due to occur and 2) the accompanying price (whether increased, decreased, or not changed at all), and you obtain a customer’s signature, you’ve likely met the minimum requirements for the change order to hold weight and be enforceable.

Keep in mind that an enforceable document goes both ways – holding the other person’s feet to the fire as well as your own, but that’s usually not a concern.

If you did not request a free Change Order Form, feel free to do so by emailing [email protected]?or Contact Us here.

You will see that these components are captured, but one thing that you can do for added clarity is to keep a running tab of the project price and note the new contract price on the change order, taking into account the change in price that has occurred, or if none, state this as well.

For example, let’s say the original contract price was $50,000. A customer requests built-ins in her living room. You calculate this will cost $5,000. On the change order form, you make a note of what the customer is requesting (i.e., built-ins in the living room, dimensions ….), list the accompanying price of $5,000, and then have a line of the prior contract price of $50,000 and then also list the revised contract price of $55,000. It’s truly just 8th?grade math of adding or subcontracting and is actually much simpler than you might think if you're new to CO Life. ?

Other helpful tips:

• Get the authorizing party’s initials in lieu of a full blown signature to keep some levity to the CO.
• Do the above in that moment if possible. If you really want to do the work, waiting until you’re back at the office to send a day or two later may be less seamless. I understand if you won’t know the price in that moment, on someone’s doorstep, all of the time, and may need to consult a subcontractor on what they would charge you to know where you need to be financially on the added work. Change orders are designed to be easy to use, and be able to pivot and think on your feet based on what is happening on the site and with your customer.
• Number the change order forms (1, 2, 3, etc.) and include a date (ideally indicating the date on which the customer signed). If you’re tracking the overall project price change as mentioned above, you can probably put the puzzle pieces together, but that’s just extra hassle.
• Send the customer a copy of the signed change order (meaning that you and the customer have signed – don’t forget your initials) to their email address on file with you. This creates rapport and a feeling of transparency and honesty.
• If you do use a napkin or a piece of paper, snap a picture on your phone so there’s an electronic copy just like you probably do with company receipts if you have a working meal or get gas in your fleet vehicle. That way, if something happens to the napkin CO (like condensation from your water bottle or sweat), there is a preserved image that you can load into your CRM or text/email the customer right then.

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Now you know; pass it on. All For Contractors is All For You!