In the construction industry, change orders are inevitable. These modifications or additions to the original scope of work can arise from design changes, unforeseen site conditions, or client requests. While change orders are common, tracking and managing them effectively is vital for ensuring project success. In this guide, we’ll explore why change order tracking is essential, how it benefits contractors, and best practices to streamline the process.
Why Tracking Change Orders Matters
Change orders impact multiple aspects of a project, including costs, timelines, and client relationships. Properly tracking them helps contractors maintain control over their projects while fostering transparency and trust with clients. Here’s why it’s important:
1. Accurate Cost Management
Change orders often lead to additional costs for labor, materials, and equipment. Without effective tracking, these expenses can spiral out of control, causing budget overruns. Diligent tracking allows contractors to capture and document all changes, ensuring that costs are accounted for accurately. This approach enables better cost management and helps contractors maintain profitability.
Learn more about managing budgets with progress billing software, which ensures transparent invoicing for changes during projects.
2. Legal Protection
Construction projects involve various stakeholders, and disputes over change orders can arise. Proper documentation of all change orders—including scope of work, costs, and approvals—serves as critical evidence in case of disputes or claims. Accurate records provide legal protection, helping contractors safeguard their interests.
3. Managing Project Schedules
Change orders can disrupt timelines, requiring adjustments to schedules, resource allocations, or task sequencing. By tracking changes in real-time, contractors can assess their impact and take proactive steps to keep the project on track. Effective scheduling tools, like those offered through real-time labor tracking software, can help manage these adjustments efficiently.
4. Improved Communication and Collaboration
Change orders affect costs, schedules, and overall project execution. Tracking them ensures all stakeholders are informed, approvals are obtained, and updates are shared with relevant team members. Clear communication minimizes misunderstandings and helps maintain strong working relationships.
5. Enhanced Documentation
Proper documentation is crucial for tracking the project’s evolution. Detailed records of change orders—complete with revised scope, costs, and approvals—provide a historical log that can be invaluable during audits, claims, or warranty periods.
Enhance your documentation processes with AIA billing tools, which simplify managing changes alongside regular project billing.
6. Boosting Client Satisfaction
Clients value transparency and professionalism. By diligently tracking change orders, contractors can build trust and ensure clear expectations. Sharing well-organized updates helps foster positive client relationships, making them more likely to return for future projects.
Best Practices for Tracking Change Orders
To manage change orders effectively, contractors should adopt the following best practices:
- Use Extra Work Authorizations (EWAs): Document client requests for additional work using an Extra Work Authorization form before pricing is added.
- Combine Change Requests: Consolidate multiple EWAs into a single Change Order Request to streamline approvals and documentation.
- Leverage Technology: Use tools like the Werx Field App to create, track, and approve change orders efficiently.
- Communicate Updates: Keep stakeholders informed of all changes and their impacts on the project timeline and budget.
How Werx Simplifies Change Order Management
Managing change orders can be complex, but Werx streamlines the process with its three-step approach:
Step 1: Extra Work Authorization (EWA)
Field teams can create an EWA using the Werx Field App to document client requests for additional work. EWAs include the requested changes but do not assign pricing at this stage, ensuring quick approvals on the job site.
Step 2: Change Order Request
Project managers can use the information from signed EWAs to create Change Order Requests, adding pricing details and combining multiple EWAs if needed. These requests are then sent to the client for review.
Step 3: Change Order
Upon client approval, Change Orders are finalized and added to the schedule of values for seamless integration into progress billing. This ensures accurate tracking of all project changes and their financial impacts.
Learn more about how Werx supports contractors with flexible T&M billing solutions and other key features.
Change orders are a critical aspect of construction project management. By tracking them diligently, contractors can manage costs, protect themselves legally, maintain schedules, and improve client relationships. Tools like Werx make change order management straightforward, ensuring projects run smoothly and profitably.
Ready to simplify your change order process? Start your 30-day free trial today or schedule a demo to see Werx in action.
