CHANGE ORDER ACCOUNTING, DONE RIGHT.
A change order touches four systems. Pricing comes first, at full burdened cost plus overhead plus margin rather than a field-guess T&M number. Then the contract record, where executed COs adjust contract value the day they're signed. Then the WIP schedule, where approved COs enter revenue and unapproved COs enter cost with disclosed treatment. Then billing, where the CO appears on the next pay app instead of whenever somebody remembers it.
Change orders are where subcontractor margin goes to die. Across SPM engagements, 40 to 60 percent of commercial profit fade traces back to COs that were never priced, never booked, or never billed. The work got built, the cost hit the job, and the paper never caught up to either one. A CO is a small job won at a 100% win rate with zero bid cost, so it should be the most profitable work you do. At most subs it's the least profitable work on the books, and nobody planned it that way.
WHAT IT MEANS.
Change order accounting is the discipline of moving a change through four systems: pricing at full burden, the contract record, the WIP schedule, and the next pay app.
The four systems fail in a specific order. Pricing goes first, because a CO priced at raw labor and material is a CO priced at a loss. Then the contract record goes stale, so percent complete computes against the wrong number. Then the WIP either understates contract value or overstates earnings. By the time the change reaches billing, nobody in the building can say what's owed.
THE CO LEAK, BY TRADE.
Electrical: death by forty small changes
Electrical COs come in $800 to $3,000 increments: directed device moves, revision deltas, and T&M tickets approved verbally at the panel. Forty of them on a nine-month job is $30K to $50K, and not one of them feels worth the paperwork in the moment. The 48-hour protocol exists because small COs compound and memory doesn't.
Civil and sitework: the quantity CO
Civil change work hides in quantities: rock clauses, unsuitable soils, and plan-versus-field dirt. The accounting requirement is survey-grade documentation tied to unit prices, reconciled monthly between field quantities and billed quantities. The CO that never got measured is the CO you can't collect.
Concrete: the design-change cascade
One structural revision cascades through formwork, rebar, embed layout, and pour sequencing, and the re-work cost scatters across cost codes where nobody totals it. Concrete CO pricing has to capture the whole cascade rather than the visible scope line. The scope line is what the GC sees, and the cascade is what you paid for.
SWPPP and multi-site: the directive nobody writes down
Multi-site trades take direction by text message: move this, add that, respond tonight. Each directive is a micro-CO that dies undocumented. The same-week documentation rule, meaning crew hours, materials, photos, and who gave the direction, is what converts texted scope into billable paper.
WHAT IT LOOKS LIKE IN DOLLARS.
One verified civil client at $7.1M in revenue ran its first CO audit under the 48-hour protocol and surfaced $310K of performed, unpriced, unbilled change work sitting inside job costs as silent fade. It was documented, priced, submitted, and substantially recovered. That's margin the company had already earned and very nearly donated.
Across SPM engagements, unbilled and underpriced change orders are the single largest driver of bid-to-final margin fade, and they account for 40 to 60 percent of it. Fixing CO accounting is the biggest lever on most jobs. That's why it gets installed in the first 60 days.
COs submitted within the same billing cycle get paid. COs argued eight months later get negotiated down, and recovery on muddy, late paper runs roughly 60 cents on the dollar. The deadline is what turns a collections fight into a routine pay app line.
WHAT HAPPENS TO A CO, STEP BY STEP.
A CO priced at raw labor and material is a CO priced at a loss. The correct stack is labor at fully burdened rates covering taxes, comp, benefits, and small tools, then material with handling, equipment at true ownership and operating cost, and subcontracted scope, then overhead at your honest rate, then margin at your target. Supervision, re-mobilization, and schedule impact are line items and not favors. A CO is a small job, so price it like one.
The original contract plus executed COs equals current contract value, and that number drives the SOV, the billing ceiling, and the WIP. Subs that batch CO entries quarterly run jobs against stale contract values for months, so billing looks ahead of contract when it's not, percent complete computes wrong, and the true size of the job is a mystery. The rule is same-day entry: once the CO is signed, the contract value gets updated and the SOV line gets added before the next pay app cycle.
Executed COs flow into contract value and earned revenue at percent complete, which is the clean case. Unapproved but performed change work is where books go wrong, because the cost is real and already in the job while booking the revenue before approval inflates the WIP with money you may never collect. The disciplined treatment is to carry the cost, book revenue only to the extent recovery is probable and documented, and disclose pending COs as a separate WIP line your bank and surety can see. A WIP stuffed with optimistic unapproved COs is the fastest way to lose a surety's trust.
The field flags the change the day it appears with a photo, a daily log entry, and a one-line description. The PM prices it within 48 hours at full burden, overhead, and margin, and the CO goes in writing with cost backup even when the GC directed it verbally. Unsigned COs get chased on a standing weekly list, and nothing performed goes past 30 days without written status. Executed COs get entered the same day into contract value, the SOV, and the next pay app.
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.
| 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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