How to Bill for Change Orders in Construction (Step-by-Step)

To bill for change orders successfully, document the client's request, provide a written price, get approval before starting work, and invoice the change order separately from the original contract. The key is written confirmation—verbal approvals lead to disputes.

What Is a Change Order?

A change order is any work requested by the client that falls outside the original scope of the contract. This includes:

• Additional work not in the original agreement
• Modifications to planned work
• Work caused by unforeseen conditions
• Client-requested upgrades or changes

Change orders are legitimate billable work, but contractors often fail to capture them properly—leaving thousands of dollars on the table.

How to Bill for Change Orders: 5 Steps

Step 1: Recognize the Change Order

When a client says any of these, it's likely a change order:

• "While you're here, could you also..."
• "I changed my mind about..."
• "Can we add..."
• "What if we moved..."
• "I didn't realize that wasn't included..."

Train yourself and your crew to flag these moments immediately.

Step 2: Document the Request

Before doing anything, document:

• What was requested
• When it was requested
• Who requested it (client name, homeowner, PM)
• Why it's outside original scope

A text message works: "Hey [client], confirming you asked us to [specific work]. This wasn't in our original agreement, so I'll price it as an extra."

Step 3: Provide Written Price and Scope

Send a clear description of:

• The work to be done
• Materials needed
• Labor estimate
• Total price (including markup)
• Impact on timeline (if any)

This can be a formal change order form or a simple text/email. The format matters less than having it in writing.

Step 4: Get Written Approval BEFORE Work

Do not start work until you have written confirmation. This can be:

• Signed change order form
• Email reply saying "approved" or "go ahead"
• Text message confirmation
• Screenshot of chat agreement

No written approval = no protection in a dispute.

Step 5: Invoice Separately

Bill change orders as separate line items, not buried in the original contract amount. This:

• Shows clearly what was extra
• Prevents disputes at final invoice
• Creates documentation trail
• Makes cost tracking easier

Change Order Documentation Template

CHANGE ORDER REQUEST

Project: [Project Name]
Date: [Date]
CO Number: [Sequential number]

Description of Change:
[What work is being added/modified]

Reason for Change:
[Client request / unforeseen condition / etc.]

Cost Breakdown:
- Labor: $[X]
- Materials: $[X]
- Markup: $[X]
- Total: $[X]

Schedule Impact: [None / Add X days]

Requested by: [Name]
Approved by: _________________ Date: _______

Common Change Order Mistakes

• Doing the work before getting approval — You lose all leverage
• Verbal agreements only — "We never agreed to that" is common
• Not pricing immediately — You'll underestimate later
• Burying in final invoice — Client forgets and disputes
• Not tracking small changes — They add up significantly

How Much Do Unbilled Change Orders Cost?

The average contractor loses 10-15% of project value to unbilled scope changes. On a $50,000 project, that's $5,000-$7,500 in uncompensated work.

Over a year:

• 20 projects × $5,000 average unbilled = $100,000 lost

What If the Client Refuses to Pay for Changes?

If you have documentation:

1. Reference the written approval
2. Show the original scope vs. what was done
3. Stand firm—you have proof

If you don't have documentation:

1. Negotiate a partial payment
2. Learn for next time
3. Never work without written approval again

Tools for Change Order Management

FAQ

Can I charge for change orders without a signed form?

Yes, if you have written approval via email or text. A signed form is ideal, but any written confirmation (screenshot-able) provides protection.

How much should I mark up change orders?

Standard markup is 15-25% on materials and 10-20% on labor, plus overhead. Some contractors charge a premium (additional 10-15%) for change order work due to disruption.

What if the client says "I thought that was included"?

Reference your original contract/scope. If it's not explicitly listed, it's not included. This is why detailed scopes matter.

Should I require deposits on large change orders?

Yes. For change orders over $1,000-$2,000, request 50% upfront, especially if materials need to be ordered.

How do I handle verbal change orders on site?

Immediately send a follow-up text: "Confirming our conversation—you'd like us to [work]. Cost will be [price]. Reply 'OK' to approve." Screenshot the reply.

The Bottom Line

Change orders are legitimate billable work. The key to getting paid is documentation:

1. Recognize the request
2. Document it immediately
3. Get written approval with price
4. Don't start until approved
5. Invoice separately

Screenshot = contract. Never do change order work without written approval.

Related: The $36,000 Scope Creep Problem | How to Document Construction Work