CHANGE ORDERS ARE A FINANCIAL SYSTEM.
Most subcontractors lose money on change orders because nothing is tracking, billing, and collecting them as financial events. Unapproved change orders are interest free loans to your GC. The average commercial project has 10 to 30 change orders, and if you're billing them late, accepting verbal approvals, or absorbing them into existing SOV lines, you're paying for work your GC owes you. Sometimes for 6 months, sometimes forever.
The difference between the two ways of running change orders is who owns the clock. Paperwork gets delegated, forgotten, and stacked on a desk, because nothing about it has a deadline attached to a dollar figure. A financial line item has a billing date, an approval status, and a person who has to answer for it in the monthly review. That's the whole change. The scope is the same, the field work is the same, and the money comes in months earlier because somebody is counting it.
WHAT IT MEANS.
A change order financial system is a process that treats every change order as a cash flow line item with a written approval requirement, full overhead applied, its own SOV line, a billing date, and a collections follow-up scheduled before the work starts.
You did the work. You documented it. You even sent the email. The change order is still sitting in a stack on somebody's desk at the GC's office, and you haven't seen a dime for it in 90 days.
This isn't unusual. It's the default outcome when change orders get managed as a paperwork task instead of a financial one. Paperwork tasks get delegated, they get forgotten, and they sit. Financial line items with billing deadlines and dollar consequences get worked. Most subcontractors know this is a problem and have no system to fix it, so it keeps happening project after project.
WHERE THE SYSTEM BREAKS DOWN.
No written approval before work starts
Verbal direction isn't an approval. A field superintendent saying go ahead isn't a change order. The work gets done, the cost hits your job costing, and six months later the GC says they never authorized it. Without a written directive, meaning an email, an RFI response, or a PCO approval, you're building on a handshake. Courts side with paper, and so does every GC accounting department when review season hits.
Change orders billed late or buried in the schedule of values
When a change order gets absorbed into an existing SOV line, or worse, doesn't get billed until project closeout, you've created a receivable with no billing anchor. Your GC's accounting team has no line item to match a payment to. It becomes a dispute instead of a payment. Change orders need their own SOV line with their own billing milestone, set up before the work starts.
No tracking system for open change orders
If you don't have a live register showing every open PCO, its dollar amount, its approval status, and its billing date, you're managing change orders by memory. Memory isn't a financial system. On a $3M project with 20 open change orders in various states of approval, you could have $200K or more sitting in limbo that nobody is chasing, and that number reads as a cash shortage rather than as a collections problem.
Overhead and supervision not priced into the change order
Most subcontractors price change orders for direct cost, which is labor and material. They leave out supervision time, PM time for submittals and documentation, equipment mobilization, and overhead burden. The result is a change order that breaks even in the estimate and loses money in the field. If your standard overhead rate is 12% and you aren't applying it to every change order, you're subsidizing your GC's budget variance out of your own margin.
WHAT IT LOOKS LIKE IN DOLLARS.
On a $2M project with 15 change orders averaging $8,000 each, that's $120,000 in work that may not be in any billing cycle yet. At the subcontractor's cost of capital, that's money you fronted to your GC for free. Every month it sits is another month it compounds against you.
For a $3M to $6M subcontractor, typical untracked change order exposure runs $120K to $280K across a $2M to $4M project backlog. A commercial project carries 10 to 30 change orders on average. Unmanaged change orders sit 60 to 180 days before anybody escalates them, and 12 to 15% of overhead gets left on the table by pricing change orders without burden.
A verified civil client at $6.7M in revenue had $245K in stalled receivables, a significant portion of it tied to change orders that had never been formally billed. That money came in within 30 days once a collections process was in place. The change order register was part of what made it possible to call and know what was owed to the dollar.
WHAT A CHANGE ORDER FINANCIAL SYSTEM LOOKS LIKE.
Before the first shovel goes in the dirt, a potential change order register is set up with columns for description, date identified, dollar amount, approval status, billing date, and collection status. Every field change that looks like a change order gets logged the day it happens. The register is the difference between chasing money and knowing what you're owed.
No work gets performed on a change order without a written directive. Email confirmation from the GC project manager counts. Verbal direction followed immediately by a written confirmation email from you counts. Verbal direction with nothing in writing doesn't count.
Every approved change order gets its own SOV line before the next pay app. It makes no difference whether it's a $2,000 change order or a $200,000 one. Separate line, separate billing milestone. If the GC pushes back, you have the written approval to back it up.
Every change order carries the same overhead rate used in your base contract pricing. The published industry figures are 8 to 15% of revenue in total indirect cost, from Jones Maresca and Company's 2025 Performance Benchmarks, and 11.8% SG&A across all respondents, from CFMA's 2024 Construction Financial Benchmarker, and neither of those is your rate, which /construction-overhead-rates-by-trade carries by trade and band. PM and supervisor time gets documented at an hourly rate on top of that. So does any equipment mobilization that wouldn't have happened without the change.
Once billed, every change order has a due date on the collections calendar. If payment hasn't come in by the GC's pay cycle plus 7 days, you call. Not email, call. Change order disputes get resolved faster by phone than by email chain, every time.
In the monthly cadence meeting, every PCO older than 30 days without written approval gets escalated. That might mean a formal notice. It might mean a conversation with the GC's PM. It definitely means it gets tracked and acted on instead of left to sort itself out at closeout.
THE OUTPUTS, NAMED.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing, no payroll, and no add-ons.
Pricing
| Last 12 months revenue | Monthly fee |
|---|---|
| Up to $1M | $1,900 to $2,900 |
| $1M to $3.5M | $2,600 to $3,900 |
| $3.5M to $6.5M | $3,800 to $5,700 |
| $6.5M to $9.5M | $5,100 to $7,100 |
| $9.5M to $12.5M | $6,100 to $8,500 |
| $12.5M to $15.5M | $7,400 to $11,000 |
| $15.5M to $18.5M | $9,400 to $13,500 |
| $18.5M+ | Quoted individually |
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions rather than a report.
Your bookkeeper keeps doing the books.
You stop touching the books.
Everything in Core, and we run the bookkeeping and the controllership as well. Nobody in your office is answering coding questions or chasing a reconciliation at month end.
We do the books. No payroll.
Every job shows its margin while it's still running.
Everything in Executive, plus the job costing and WIP platform set up, loaded with your cost codes, and managed for you every month. You never have to learn it.
We do the job costing.
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