Change orders are one of the easiest places for contractor margin to disappear. The work gets done, the customer remembers a different conversation, and the extra cost never turns into collected cash.
What a change order should record
A practical change-order log should capture the job, change-order number, date, description, reason for the change, extra cost, proposed selling price, approval status, invoice status and payment status.
The goal is to create one commercial trail from the moment the scope changes until the money is collected.
1. Record the scope change immediately
Do not rely on memory. Write down what changed and why. If a customer requests additional work, identify it separately from the original scope before the new work becomes normal site activity.
2. Price the extra cost and profit
A change order can increase revenue while still reduce overall margin if it is priced badly. Add the extra labour, materials, subcontractor cost and other direct cost, then apply your pricing logic to the revised cost.
3. Track approval status
Use clear statuses such as Draft, Submitted, Approved, Rejected or Cancelled. That makes it obvious which extras are commercially agreed and which are still at risk.
4. Keep approval separate from invoicing
An approved change is not the same as an invoiced change. Your tracker should show whether the approved amount has actually been billed.
5. Track payment separately from invoicing
An invoice is not cash. Record the amount invoiced, amount paid, balance outstanding and due date. This prevents approved variations from disappearing into a general accounts-receivable balance.
Example
Assume a client requests additional work with £1,800 of extra direct cost. You price the change at £3,000. The change is approved, invoiced for £3,000 and the customer pays £2,000.
Your tracker should still show £1,000 outstanding even though the change itself is marked approved and invoiced.
Protect the original contract value
Keep the original contract amount visible and track approved changes separately. This lets you see the revised contract value without losing the original commercial baseline.
Build the workflow into one tracker
The Change Order & Payment Tracker is designed around this exact workflow: scope changes, approval, extra cost and sell value, invoices, payments, outstanding balances and overdue items. For a complete system that also includes estimating and job costing, use Contractor Profit OS.