Change Orders
Every Change Order changes your profit.
The question is which way.
A Change Order means the job is no longer exactly the job you originally priced.
Something changed.
That change has a cost.
It has a price.
And when it’s all over, it either added to your profit or took away from it.
There really isn’t a neutral Change Order.
Some contractors love Change Orders.
There’s a reason.
For some electrical contractors, Change Orders are a constant source of frustration.
Extra work gets done.
Scope gets argued about.
Approvals come late.
Paperwork gets missed.
Billing gets delayed.
Money gets disputed.
Other contractors manage Change Orders extremely well — and changed work becomes an important source of additional profit.
They both get Change Orders.
What matters is what happens after the job changes.
The job changed.
Did your price change with it?
A wall moved.
Fixtures changed.
The GC asked for something extra.
A customer changed their mind.
The drawings changed.
An unexpected condition was discovered.
Work already installed had to be removed or relocated.
Whatever caused it, the work you’re now being asked to perform isn’t necessarily the work you originally priced.
If the work changes, somebody has to recognize that the price may need to change too.
Doing extra work isn’t the same as getting paid for extra work.
You can perform the work perfectly.
You can spend the labor.
You can install the material.
You can make the customer happy.
And still lose money on the Change Order.
Why?
Maybe nobody recognized the change soon enough.
Maybe the cost was underestimated.
Maybe the work started before the price was approved.
Maybe the documentation wasn’t there.
Maybe it never got billed.
Maybe it got billed but never collected.
The work can be finished long before the financial story is finished.
A Change Order isn’t just paperwork.
It’s work with a cost, a price — and eventually a profit or loss.
The document matters.
The approval matters.
The signature matters.
But none of them tells you whether the Change Order ultimately made money.
The real story is the changed work itself:
What changed?
What will it take to produce?
What will it cost?
What should we charge?
Who needs to approve it?
Can the field proceed?
What did we actually perform?
What did it actually cost?
Did we bill it?
Did we collect it?
And finally:
What did we actually make?
Every Change Order has a life.
Did yours make it all the way through?
A profitable Change Order has to survive more than one step.
Recognized
Something changed and somebody identified it.
Documented
What changed is clear enough that everyone knows what is being discussed.
Costed
You understand what the additional work is expected to cost.
Priced
You determine what the changed work should sell for.
Approved
The right person authorizes the work according to your company’s rules.
Released
The field knows whether it should proceed.
Performed
The changed work actually gets built.
Billed
The additional amount makes it onto an invoice.
Collected
The money actually arrives.
↓
Measured
What did the Change Order actually make?
Missing any step can change the result.
The best Change Order price can still become a bad Change Order.
You priced it correctly.
The customer approved it.
Great.
But then the work took twice the labor you expected.
Or material cost more than anticipated.
Or the change disrupted other work.
Or the crew had to return several times.
Or the work was performed differently than expected.
Approval protects the price.
It doesn’t guarantee the profit.
The same expectation-versus-reality question that applies to the original job applies to the Change Order too.
And the opposite can happen.
A Change Order can perform better than you expected.
Perhaps your labor estimate was conservative.
Maybe the crew found a better way to perform the work.
Maybe material cost less.
Maybe your process for handling the change worked particularly well.
Maybe you priced the disruption correctly and then managed it efficiently.
That’s not merely good news.
It’s information.
Why did this Change Order perform so well?
Is there something you should do again?
A Change Order lost money?
Find out why. Correct it.
A Change Order made great money?
Find out why. Reinforce it.
The purpose isn’t merely to divide Change Orders into winners and losers.
It’s to understand what created the result.
Was the problem pricing?
Labor?
Material?
Approval?
Documentation?
Timing?
Billing?
Collection?
Production?
Was the success caused by better estimating?
Better management?
Better execution?
Better pricing?
The result tells you what happened.
Understanding the cause gives you something you can act on.
How much extra work have you done that you never got paid for?
It’s one of the most expensive ways for a profitable job to lose margin.
A superintendent asks for something.
Someone in the field says yes.
The work gets done.
Everybody moves on.
Weeks later, someone asks:
Was that part of the original scope?
By then, the labor has been spent.
The material has been installed.
Memories are less clear.
Documentation may be incomplete.
And the argument has become much harder.
Changed work needs to become visible when it happens — not when someone notices the missing money.
But Change Orders aren’t only about protecting yourself.
They can be profitable work.
If the customer needs additional electrical work and your company can provide it profitably, that’s business.
The goal isn’t to avoid Change Orders.
And it isn’t to turn every conversation into a fight over scope.
The goal is to know when the work changed, understand what the change means, manage it according to your company’s rules, and make sure the financial result follows the work.
A well-managed Change Order can be an opportunity.
Your company has its own rules.
Your software should respect them.
Some companies require written approval before any changed work begins.
Others allow certain people to authorize work up to a dollar amount.
Emergency work may follow a different process.
A trusted GC may be handled differently from a new customer.
Small changes may follow one path and major changes another.
There isn’t one Change Order workflow that fits every electrical contractor.
MEPTrax is being built around the idea that your company’s rules should determine how work moves through the business — rather than forcing your company to reorganize itself around somebody else’s software.
The Change Order doesn’t end when the work is done.
It ends when you know what happened to the money.
The field may be finished.
But:
Was it billed?
Was the full amount billed?
Was it collected?
What did the work actually cost?
Did the labor assumption hold?
Did the material assumption hold?
What was the actual margin?
Until you know the financial result, you don’t really know how the Change Order performed.
And Change Orders change the original job too.
Suppose you bid a project expecting a certain amount of labor, cost and profit.
Then the project accumulates Change Orders.
Some perform extremely well.
Some don’t.
Some disrupt the original work.
Some extend the schedule.
Some add profitable volume.
At the end, there are really two questions:
How did each Change Order perform?
and:
What did all those changes do to the job?
That’s a much bigger question than whether the Change Order form was approved.
That’s where Operational Awareness becomes important.
A Change Order touches more than Change Order software.
It can affect:
Scope
Labor
Material
Production
Schedule
Billing
Cash
Profit
And each answer can create another question.
The scope changed.
What will it cost?
We priced it.
Was it approved?
It was performed.
How did actual production compare with what we expected?
It was billed.
Was it collected?
It was collected.
What did we actually make?
Your questions don’t stop where the Change Order screen ends.
MEPTrax is being built to preserve the relationships between them.
Learn about Operational Awareness →
What happened should improve what you do next time.
Over time, your Change Orders can teach you something.
Which kinds of changes do you price well?
Which ones routinely consume more labor than expected?
Where do approvals get stuck?
Which work tends to create disruption?
Which customers or project conditions create recurring problems?
Where are your best Change Order margins coming from?
Yesterday’s Change Orders should help you manage tomorrow’s better.
Correct what isn’t working.
Reinforce what is.
MEPTrax Change Order capabilities are coming.
They are not part of MEPTrax Takeoff today.
MEPTrax is being developed toward Change Order capabilities that follow changed work through its operational and financial life — according to the rules of the company using it.
The objective isn’t simply to create another Change Order form.
The objective is to know whether changed work made you money.
Change Order capabilities — COMING SOON
MEPTrax starts with Takeoff.
That’s what’s available today.
Before there can be a change to the work, you first need to establish the work you expect to perform.
That’s where MEPTrax starts.
MEPTrax Takeoff
AVAILABLE NOW
Work directly from PDF electrical plans. Count devices and assemblies. Organize the takeoff by room or area. Review your quantities and export your work.
Try MEPTrax Takeoff Free
30 days free. No credit card required.
Start with Takeoff.
Grow with MEPTrax.
MEPTrax Takeoff
AVAILABLE NOW
Know the work.
Plans → assemblies → quantities
MEPTrax Quote
COMING SOON
Know what you’re selling.
Cost → price → proposal → commitment
MEPTrax Business
COMING SOON
Know what’s happening — and what you actually made.
Production → labor → Change Orders → money → profitability
MEPTrax Takeoff is available today. Change Orders, Quote, Business and other future capabilities described on this page are under development and are not included with a Takeoff subscription unless explicitly stated.
Your company made money last year.
Do you know exactly where it came from?
Some jobs performed better than expected.
Some crews did.
Some types of work did.
Some Change Orders did.