You're halfway through a bathroom fan swap when the customer says, "Since you're up there, could you put one in the other bathroom too?" It sounds like a favor that takes an hour. So you say sure, quote it off the top of your head, and shake on it. By the end of the week you've done a second install, bought a duct run you didn't price, and invoiced a number nobody wrote down. A change order is the fix: a short written record of what changed, what it costs, and that the customer agreed.
What a change order is
A change order is a written amendment to a job you've already agreed. It records a change to the scope - something added, removed, or swapped - along with the price effect and the customer's approval. The original estimate stays as it was. The change order sits alongside it, so anyone can see what was agreed at the start and what was agreed later.
Changes don't have to be additions. A customer who drops the second coat of trim or downgrades a fixture is a change too, and it can be a credit. Writing those down protects you both.
Why "we'll sort it out at the end" costs you
Verbal add-ons feel friendly and fall apart at the invoice. Three things go wrong:
- You underprice it. A price quoted on the spot usually covers labor and forgets the materials markup, the overhead, and the profit. The extra work ends up earning less than the job it was attached to.
- The customer remembers it differently. "I thought that was included" is hard to argue against when nothing was written down.
- Small changes pile up. One extra outlet doesn't hurt. Ten of them, none priced, is a job that lost money while everybody was being nice.
What to put in a change order
Keep it short. A change order that takes ten minutes to write doesn't get written. Cover these points:
- The job it belongs to - customer, address, and the original estimate it amends.
- A one-line title - "Second bathroom fan and duct," not "extra work."
- What is and isn't included - the specific work, and anything you're deliberately leaving out so it can't be assumed.
- The price change - a plus for added work, a minus for a credit, as its own line.
- Any effect on the schedule - if the extra work pushes the finish date, say so.
- The customer's approval - a yes they can be pointed to later, with the date.
Price it with the same math as the original job
The most common change-order mistake is pricing it by feel. The extra work has the same costs as any other work: labor, materials, overhead, and the profit you're aiming for. Run it through the same calculation you used for the original estimate.
Here's the fan swap. The original job is three hours of labor and a $120 fan. The change order adds a second fan and a duct run, two more hours and $135 of parts. Both use a $70 labor rate, a 20% materials markup, 15% overhead, and a 20% target margin.
| Line | Original job | Change order |
|---|---|---|
| Labor ($70/hr) | $210.00 | $140.00 |
| Materials with 20% markup | $144.00 | $162.00 |
| Subtotal | $354.00 | $302.00 |
| Overhead (15% of subtotal) | $53.10 | $45.30 |
| Cost basis | $407.10 | $347.30 |
| Price (cost basis ÷ 0.80) | $508.88 | $434.13 |
| Job total with the change order | $943.01 | |
Illustrative example — figures chosen to show the method, not a quote. How we source figures.
Now compare that with the off-the-cuff answer. "Two more hours and the parts, call it $275" feels fair: $140 of labor plus $135 of materials. But $275 only covers the labor and the parts at cost. Nothing is left for overhead or profit, and the properly priced change order is $434.13. The gap is $159.13 on a favor that felt like a small yes.
Price the change order at the same margin as the original, not at a discount. Extra work often arrives when you're already on site and it feels like it should be cheaper. Some of it is: you've saved a drive. If so, take out the specific travel you're saving. Don't quietly drop the overhead and profit.
Get approval before you do the work
The order matters. Write the change, price it, get a yes, and only then start. A change order approved after the work is done is just an invoice with extra steps, and it's the version most likely to turn into an argument.
- Send it while you're still on site or the same day. The longer it sits, the more the customer's memory drifts.
- Make yes and no both easy. A customer who can decline without awkwardness answers faster than one who feels pressured.
- If they say no, that's fine. You've protected your day. Finish the original job and move on.
- Emergencies still get a note. If you must act first, for instance to stop a leak, write down what you did and why as soon as you can, and get the approval after.
When a change order is the wrong tool
Before the customer has approved the estimate, you don't need a change order. Just revise the estimate. And once a job has been invoiced, the change belongs on the invoice or on a new job. A change order is for the stretch in between: the work is agreed, and it isn't billed yet.
Track every change on the job itself
In TradeReady you can add a change order to an approved job with a short title and an amount, and use a negative amount for a credit. Send it to the customer as a link by text or email, or record their yes or no on site with a note. Approved change orders are added to the job's total, while the original estimate stays untouched, so you can always see what was agreed at the start. Price the extra work in the calculator first so the amount includes your overhead and margin.
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The bottom line
Scope changes are normal. Unpriced, unwritten scope changes are what hurt. Write the change in one line, price it with the same math as the original job, and get a yes before you start. The customer gets clarity, you get paid for the extra, and the "quick favor" stops being the least profitable part of the job.
Common questions
What is a change order?
A change order is a written amendment to a job that has already been agreed. It records what changed in the scope, the effect on the price, and the customer's approval. The original estimate stays as it was, and the change order sits alongside it so both are visible.
Do I need a change order for small extras?
It's worth writing one for anything you would otherwise do for free by accident. A single small extra may not move the job much, but unpriced extras add up quickly. A one-line change order with a price takes a minute and keeps the job profitable. Where you draw the line is your call; just be consistent.
How do I price a change order?
Use the same calculation as the original job: labor, materials with your markup, overhead, and your target margin. Pricing extra work by feel usually covers labor and parts at cost and leaves nothing for overhead or profit. If the change saves you something real, such as a repeat trip, you can reflect that, but don't drop the overhead and margin.
Can a change order reduce the price?
Yes. When a customer removes work or downgrades a material, record it as a change with a negative amount, a credit. That keeps the job total accurate and gives both sides a written record of what was taken out.
What if the customer refuses to sign a change order?
Then don't do the extra work. Finish the original scope as agreed. If the change is urgent and you have to act first, for instance to stop damage, record what you did and why as soon as possible. Contract and dispute rules vary by location, so check what applies to you.
What is the difference between a change order and a new estimate?
A new estimate covers a separate job. A change order amends a job you have already agreed and haven't billed yet. Before the estimate is approved you can simply revise it, and after the job is invoiced the change belongs on the invoice or a new job.
- The figures above are arithmetic worked through on a sample job to show how a change order is priced; the method is standard small-business math. See how we research these guides.
- Whether a change order must be in writing, who must sign it, and how disputes are handled can depend on your contract, license type, and local rules. Confirm what applies in your jurisdiction.
- Product notes describe the change-order feature as it works in TradeReady today: add to an approved, not-yet-invoiced job; send by link or record the decision on site; approved amounts add to the job total.